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Full text of "Charting a new course : Southeast Asia in a time of change : a report"

/ 



94th Congress 1 
2d Session / 



COMMITTEE PRINT 



CHARTING A NEW COURSE: 
SOUTHEAST ASIA IX A TIME OF CHANGE 



A REPORT 



BY 



SENATOR MIKE MANSFIELD 
MAJORITY LEADER 
U.S. SENATE 



TO THE 



COMMITTEE ON FOREIGN RELATIONS 
UNITED STATES SENATE 



REPORT NUMBER THREE 




C/3 



DECEMBER 1976 



Printed for the use of the Committee on Foreign Relations 



79-905 



U.S. GOVERNMENT PRINTING OFFICE 
WASHINGTON : 1976 



COMMITTEE ON FOREIGN RELATIONS 



JOHN SPARKMAN, 
MIKE MANSFIELD, Montana 
FRANK CHURCH, Idaho 
STUART SYMINGTON, Missouri 
CLAIBORNE PELL, Rhode Island 
GALE W. McGEE, Wyoming 
GEORGE S. McGOVERN, South Dakota 
HUBERT H. HUMPHREY, Minnesota 
DICK CLARK, Iowa 
JOSEPH R. BIDEN, Jr., Delaware 



Alabama, Chairman 
CLIFFORD P. CASE, New Jersey 
JACOB K. JAVITS, New York 
HUGH SCOTT, Pennsylvania 
JAMES B. PEARSON, Kansas 
CHARLES H. PERCY, Illinois 
ROBERT P. GRIFFIN, Michigan 



Pat M. Holt, Chief of Staff 
Arthur M. Kuhl, Chief Clerk 



(ID 



CONTENTS 



Page 

Letter of transmittal v 

Text of the report 1 

I. Introduction 1 

II. Philippines 3 

III. Indonesia 6 

IV. Malaysia 11 

V. Singapore 12 

VI. Papua New Guinea 14 

VII. Concluding comments 16 

Appendixes: 

1. "The End of the Postwar Era: Time for a New Partnership of 

Equality With Japan," report by Senator Mike Mansfield to the 

Senate Committee on Foreign Relations 19 

2. "Postwar Southeast Asia: A Search for Neutrality and Independ- 

ence," report by Senator Mike Mansfield to the Senate Com- 
mittee on Foreign Relations 79 

(Hi) 



Digitized 


by the Internet Archive 








in 2013 







http://archive.org/details/chaewcoursOOunit 



LETTER OF TRANSMITTAL 



December 10, 1976. 

Hon. John Sparkman, 

Chairman, Committee on Foreign Relations, 
U.S. Senate, Washington, B.C. 

Dear Mr. Chairman: Transmitted herewith is a report of my 
final official mission abroad as a L T nited States Senator. It contains 
observations which result from a series of visits this year to various 
parts of Asia and the Pacific. 

During July I spent eight days in Japan following which I sent 
Mr. Francis R. Valeo and Mr. Norvill Jones, who accompanied me, 
to Korea and Taiwan, respectively, to obtain current information 
concerning issues relating to those countries. A report of that study, 
"The End of the Postwar Era: Time for a New Partnership of 
Equality With Japan", was filed with the Committee and is included 
as an appendix to this report. In August, I traveled to Thailand, Laos, 
and Burma to view the situation in that part of Southeast Asia. My 
observations as a result of that visit were reported to the Senate in a 
speech on August 26, which is also included as an appendix to this 
report. 

The third segment of my travels to assess the current scene in Asia 
was to the People's Republic of China where I spent three weeks during 
September and October. My observations on China were transmitted 
to the Committee on November 18. After leaving China, I visited the 
Philippines, Indonesia, and Papau New Guinea. 

In the Philippines I met with President Ferdinand E. Marcos and 
officials of the Ministry of Foreign Affairs; in Indonesia I conferred 
with President Suharto, leaders of Parliament, and met informally 
with other government officials; and in Papau New Guinea I had 
informative talks with Acting Prime Minister Sir Maori Kiki and 
also had opportunity for discussions with other local officials. In each 
country I also received briefings from the staff of the local U.S. Mis- 
sion. While in Indonesia, I received a briefing on developments in both 
Malaysia and Singapore from officers of the United States Embassy 
in each country who met with me in Jakarta for that purpose. 

This report contains both observations on the non-China portion of 
my last mission and some observations on the general situation in 
Asia. 

I was accompanied on the trip by Senator John Glenn and his wife, 
Anna, both of whom contributed greatly to the mission. I wish to 

(V) 



VI 



express my appreciation to the Department of State and to the U.S. 
missions in each country visited; the Department of the Air Force 
for transportation; Deputy Assistant Secretary of State Victor 
Dikeos for his efficient handling of logistics and other details, my 
assistant Mrs. Salpee Sahagian and Senator Glenn's secretary, Miss 
Kathy Prosser, for their able and willing help at all times ; Dr. Thomas 
Lowe of the Navy Medical Corps for his services; Mr. Francis R. 
Valeo, Secretary of the Senate, Mr. Charles R. Gellner, Senior 
specialist in Foreign Affairs of the Congressional Research Service, 
Library of Congress, and Mr. Norvill Jones of the staff of the Com- 
mittee on Foreign Relations, for their assistance. 

I also wish to express special appreciation to my wife, Maureen, for 
her usual valuable contribution. 
Sincerely, 

Mike Mansfield. 



CHARTING A NEW COURSE : SOUTHEAST ASIA IN A TIME 

OF CHANGE 



I. Introduction 

Since President Nixon's visit to Peking in 1972 winds of change 
have swept Asia. It is in Southeast Asia that those winds have blown 
the strongest, increasing in intensity as a result of the 1975 collapse of 
the U.S. -supported governments in Indochina. Nations in the region 
are making major reassessments of their relationships. Nationalism, 
neutrality, and a growing interest in regional cooperation are the sig- 
nificant factors at work. The Association of Southeast Asian Nations 
(ASEAN), formed in 1970 by Indonesia, Malaysia, Thailand, the 
Philippines, and Singapore, has been the principal vehicle for ad- 
vancing regional cooperation. Two underlying principles have con- 
tributed to ASEAN's success to date, a common readiness to refrain 
from trying to force agreement on contentious issues and a policy of 
avoiding becoming identified with any major power. Gradualism and 
a recognition that the interests of member states differ have governed 
the group's cautious approach. As an organization its goal is not to 
become a super-state but something of a club to promote common 
interests. 

In April 1976 the heads of state of the ASEAN nations, meeting on 
the Indonesian island of Bali in the organization's first summit meet- 
ing, signed a Treaty of Amity and Cooperation which, among other 
things, created a mechanism for settling regional disputes. At this 
meeting, for the first time, ASEAN was given an explicitly political 
character. A secretariat for the organization has now been opened in 
Jakarta, in keeping with the keystone role Indonesia, as the most 
populous of the member nations, expects to play. To date, there has 
not been any formal contact between ASEAN and the United States 
although there has been a limited formal dialogue between the orga- 
nization and the European Economic Community as well as with 
Japan. The question of direct contact with the United States is sensi- 
tive because of Indochinese suspicion that ASEAN is a tool of Ameri- 
can interests. 

No regional issue concerns ASEAN nations so much as the inten- 
tions of Vietnam, now the strongest military power by far in the 
region. Last July Phan Hien, Deputy Foreign Minister of Vietnam, 
visited throughout the region in an apparent effort to establish closer 
bilateral relations with the non-Communist nations in the area. How- 
ever, in September, at the Colombo Non-Aligned Conference, Laos, 
supported by Vietnam, succeeded in defeating a Malaysian effort to 
win the Conference's endorsement of a Southeast Asian zone of peace, 
freedom and neutrality. During the conference debate Vietnam's 
Foreign Minister Nguyen Duy Trinh sought to assure the ASEAN 



(1) 



2 



representatives that its support for Laos' position should not be in- 
terpreted as a change in its policy to seek normalization of relations 
with nations in the area. Nevertheless, Laos' action, founded on linger- 
ing suspicion that ASEAN is a covert device for continued American 
intervention, rearoused fears over Vietnam and its Indochinese allies' 
intentions, concerns that had been somewhat quieted by Phan Hien's 
earlier visits. But the surface reaction was mild and, with the exception 
of Thailand where the October military coup changed the picture, the 
trend toward easing tensions between ASEAN nations and Vietnam 
continues. Some observers see ASEAN-Indochina relations developing 
along lines of the economic cooperation between Western and Eastern 
Europe, envisioning economic ties between the two groupings to that 
extent. 

Thus far China has taken a detached view of ASEAN but no doubt 
would view with concern any tendency to convert the organization 
into a military alliance. Until the recent coup in Bangkok, China's 
relations with Thailand were warming rapidly. Since then a distinct 
chill has set in. Relations between China and the Philippines are 
good and with Malaysia they are correct but cool. Indonesia, which 
suspended diplomatic relations with China following Sukarno's ouster 
from power, is still watching and waiting to restore contact, fearing 
the possible impact an official Chinese presence could have on its 
Chinese community. Singapore waits a move from Indonesia. Taiwan 
has no embassies in the ASEAN countries but any step by China to 
take Taiwan by force would be seen as an upsetting development 
throughout the area. 

Although ASEAN has not yet settled any of the inter-regional dis- 
putes that vex the region, such as the dormant Philippine claim to 
Sabah and the Thai Muslim separatist movement, the growing value 
all members attach to ASEAN harmony and goodwill helps dampen 
down these old disputes and may have kept new ones from arising. 

Progress by ASEAN on economic cooperation has been slow, 
primarily because the member states are at different stages of develop- 
ment. The more developed members, Singapore and the Philippines, 
favor a regional free trade policy in which they see themselves as the 
bankers and manufacturers for the rest of the area. The less developed 
members, led by Indonesia, wish to protect their own developing in- 
dustries and are wary of penetration by trans-national enterprises, 
which tend to be dominated by the overseas Chinese. 

Specific ASEAN industrial projects are being developed. Basic 
agreement has been reached on building plants to serve area-wide 
needs for fertilizer, soda ash, and diesel engines. However, many de- 
tails remain to be worked out on these projects, including the funda- 
mental question of tariff preferences for the products. An initial step 
toward cooperation on regional banking matters was recently taken 
when the first ASEAN Bankers Conference agreed to establish an 
ASEAN Bankers Council whose objective would be "to formulate 
policy for coordination and cooperation amono- ASEAN bankers for 
the development of the ASEAN region." The first concrete act was 
agreement to set up a regional bank clearing arrangement. These steps, 
small though they may be, are building blocks for cooperation on other 
matters of common interest. 

A strong economic development oriented ASEAN, tied to no major 
power, could be an important factor in the future of Southeast Asia. 



3 



United States policy should be to encourage regional cooperation but 
to refrain from trying to force the pace or direction of the movement. 
As a result of past American policy in the region, principally the 
attempt to create non-neutral regimes which were strictly aligned in 
polic}^ with the United States, nations now find it disadvantageous 
to be identified too closely with U.S. interests. What the United States 
needs in Southeast Asia over the long run are not weak nations tied to 
American purse strings but independent, neutral nations which coop- 
erate to advance common, peaceful objectives. In the interest of 
regional stability and world peace, cooperation between the nations of 
ASEAN and Vietnam, Laos, and Cambodia is much to be desired. 
Perhaps eventually Burma can be brought into such an arrangement. 
However, strong animosities still exist within the region, centering on 
Thailand and Vietnam. Thailand's role in the Vietnam war makes it 
highly suspect to its Indochinese neighbors and the long history of 
troubles between it and Burma places it in a key position for encourag- 
ing or discouraging the expansion of regional cooperation. 

The October coup in Thailand was a serious blow to budding efforts 
to heal the war wounds with the nations of Indochina. In the name 
of stability, a situation has been created that may well lead to in- 
creased instability. The departure of American forces from Thai bases 
three months before the coup was a sound move for both Thailand and 
for long-range American policy in the region. There is no justification 
in terms of our national interest, intelligence gathering or otherwise, 
which could possibly warrant the return of an American military 
presence to Thailand. Any resumption of U.S. operations in Thailand 
would inevitably be used to tie the United States to the policies of 
the current military regime. The discontent of poverty cannot be 
cured by guns and the efforts to do so promise only further rebellion 
in the poor, neglected rural areas. 

The United States is still tied to Thailand by the moribund SEATO 
Treaty. One of the first priorities of the new Administration should 
be to review this vestige of our misguided post-World War II policy 
in Southeast Asia before it gets the nation into further difficulty. 

II. Philippines 

Following my 1975 visit to the Philippines I reported to the Com- 
mittee that : 

The Philippine Republic is experiencing a period of growing national assertion 
and economic progress. At the same time, its ties with the United States which 
go back three-quarters of a century are in transition. What is involved in this 
transition of principal concern to the United States are the vestiges of the 
previous dependency relationship which, in my judgment, no longer accord with 
the enduring interests of either nation. There is a need for a reshaping of atti- 
tudes and arrangements which will reflect the changes that have taken place 
within the Philippines and in the Pacific and the world. The future of the 
Philippines is bright and so, too. can be the outlook for continued cooperation 
and beneficial interchange with the United States if the adjustments which are 
now required are made in good time and are managed with sensitivity and 
understanding — on both sides. 

The Philippines is now charting a course of independence and 
neutrality which seeks to mnintnin °rood relations with all of the major 
powers and identify the Philippines with the Third World. Self- 
reliance and national pride are stressed, exemplified in the nation's 



4 



rejection of external assistance following the earthquake and tidal 
wave which struck the Philippines last August. 

The year 1976 marked the fourth of martial law rule by President 
Ferdinand E. Marcos. There seems to be no widespread sorrow in the 
Philippines over the loss of the prior system. Martial law appears to 
be tolerated by most. A measure of law and order has been brought 
about and there has been the beginning of a concentrated attack on 
deep-rooted social problems. A great handicap of the past, the lack 
of a sense of national identity, is being tackled and national pride 
stimulated in various ways. Technocrats in the government are being 
given greater authority and recognition and more expertise is being 
sought to bring to bear on social problems. 

The Muslim insurgency in the southern islands is less an active 
problem than in the past but it continues, as does the Communist in- 
surgency in Central Luzon. The insurgencies are an economic, finan- 
cial, and political drain on the government. The bulk of the Philip- 
pine army is tied down on Mindanao and nearby islands. The level of 
military activity has been reduced but, to date, there has been no real 
political dialogue between the government and the Muslim insurgents 
or political and economic change sufficient to satisfy the Muslims. It 
was recently agreed, however, that talks with the insurgents would 
commence through the auspices of Libya which has been a factor in 
financing the Muslim revolt. This is a hopeful sign and may possibly 
result in progress toward a solution to the dispute. 

As to the general economic situation, the Philippines had a $1.2 bil- 
lion trade deficit in 1975, a situation that is expected to continue for 
the next several years. Increased petroleum prices have taken a heavy 
toll on the Philippines' balance-of-payments situation with the cost of 
petroleum imports rising from $245 million in 1974 and to an esti- 
mated $1 billion this year. 

The economic growth rate for 1976 will be approximately 6 per- 
cent while inflation is running at about 5.4 percent, considerably bet- 
ter than in 1975. The World Bank has estimated that in the 1980's the 
Philippines will need $9 billion in external financing above retained 
earnings but the country's debt-service burden is already high at 16 
percent of exports and is expected to increase to 18 percent by 1980. 

One of the most difficult problems facing the Philippines is the 
brain drain. The Republic has a very literate population and a well- 
trained managerial class but there is an outflow of trained Filipinos. 
It is estimated, for example, that there are some 25,000 Filipino 
doctors and 45,000 Filipino nurses in the United States. A developing 
country cannot afford such a loss and must find ways to stem this out- 
flow of talent. 

A rapidly growing population is one of the many problems facing 
the Philippines. From a population of 20 million in 1946 the number of 
Filipinos has escalated to 43 million today and the total is expected 
to reach 85 million or more by the turn of the century. Forty-throe 
percent of the population is now under 15. Pressures are already such 
that some 700,000 to 800,000 jobs are needed each year for new job 
seekers and that requirement will grow to about one million by 1980. 
There is in these projections a great potential for discontent among 
young people over the next 10 to 15 years. 

Food constituted some 10 percent of total imports. This year, how- 
ever, the Philippines became self-sufficient in rice, thanks primarily 



5 



to new strains of miracle rice, an improved farm credit system and 
other agricultural reforms. It is also self-sufficient in white corn. There 
is still a substantial shortage of feed grains. Large imports of wheat 
and other food products, amounted to some $242 million in 1974. The 
simple fact is that the Philippines must grow more food for more 
people on less land in the years ahead. In 1900 there were four hectares 
of land per person ; now there are less than .8 per person. 

President Marcos was an early advocate of family planning and 
his government recognizes that rapid population growth is the major 
impediment to economic and social progress. Public awareness of the 
population problem is great but, thus far, the government's emphasis 
on family planning has been in the cities although 70 percent of the 
people live in the rural areas. In five years the number of family plan- 
ning clinics has gone from zero to 2,400. 

As for economic relations between the United States and the Philip- 
pines, the Laurel-Langley agreement which set the framework for 
relations between the two countries in the postwar period expired two 
years ago and no successor agreement has been negotiated. In 1975 the 
Philippine exports to the United States were $655 million, smaller 
than the previous year because of lower commoditv prices and smaller 
sugar imports. United States exports to the Philippines increased to 
$754 million bringing about a favorable balance for the United States 
for the first time in many years. The United States is the Philippines 
second largest trading partner after Japan. Japan has also replaced the 
United States as the leading investor although U.S. investments in 
the period from 1970 to 1975 were double that of Japan. The total mar- 
ket value of U.S. investments is some $2 billion, although they are 
only $1 billion at book value. Little American capital is now going 
into the Philippines except for investments in banks. 

There have been informal talks between the two countries about a 
successor agreement to the Laurel-Langley agreement. The Philip- 
pines is interested in trade concessions while the United States' pri- 
mary interest is in investment guaranties. The talks have now been 
suspended but are expected to resume in 1977. 

Bilateral relations between the United States and the Philippines 
are presently focused on the base negotiations which began in Wash- 
ington last April and moved back to the Philippines in June. The 
continued presence of the bases nuts the Philippines in something of 
a difficult posture vis-a-vis ASEAN goals of independence and neu- 
trality and the Philiooines' policv of seeking a Aill -identification 
with the Third World. However, Filininos recognize that the bases 
serve important mutual interests. The Chinese, concerned over Soviet 
influence in the Pacific, appear content to see the bases remain. I was 
told by one Chinese official in Peking : 

We believe it is always not a good thing to have forces stationed on foreign 
soil. It seems your situation is also a result of the fact that you have interests 
to protect. As to how you go about that, it is a matter for you to decide. 

Clark Air Base is the largest overseas military base of any country. 
The Subic Naval Base, a maior station for servicing the Seventh 
Fleet, is the most important U.S. naval base west of Hawaii. U.S. 
military strategists consider the bases indispensible to a continued 
U.S. military presence in the Western Pacific. Some 16,000 U.S. serv- 
icemen a™ stationed on the bases, and they are ioined by an additional 
7,000-20,000 more at any one time from fleet units calling at Subic Bay. 



6 



Substantial sums are added to the Philippines' economy by the bases, 
$142 million last year, not including the multiplier effect of the spend- 
ing. The acreage occupied by the bases is so vast that some 46,000 acres 
at Clark have been surplus to U.S. military needs for years. It is said 
that squatters on land at Clark raise sugar cane valued at some $10 
million annually. Work that can be done at Subic costs $25 per man- 
day compared with $100 per man day for U.S. facilities in Japan and 
$200 per man-day in United States shipyards. 

Both the United States and the Philippines recognize that the 1946 
Base Agreement is obsolete. This agreement gives the United States 
the freest use of any foreign base in the world and, in effect amounts to 
a grant of extraterritorial rights. It is this question which is primarily 
at issue in the base negotiations. Other issues include financial pay- 
ments, manner of usage and restraints on personnel. In brief, the 
problem is to attune the U.S. presence to the Filippino drive for full 
independence. One related problem concerns taxation of on-base com- 
mercial activities. The exchanges at the two bases do $65 million worth 
of business annually and goods passing through them often end up on 
the black market thus evading Filipino taxes, an operation that is ex- 
tensive and well organized. It is said that an item which sells for one 
dollar in a base exchange will bring $2.50 on the black market. 

The base negotiations are likely to remain in limbo until the new 
Administration assumes office in January. I am confident that satis- 
factory arrangements can be worked out thereafter. There are im- 
portant mutual interests to be served by retaining the bases and on 
this common ground an agreement can be reached. 

A matter of special note involves the Spratley Islands which lie to 
the West. With oil exploration a matter of growing regional friction, 
the islands are a potential source of difficulty in view of the existence 
of the U.S. -Philippines Mutual Securtiy Treaty. The Philippines Re- 
public lays claim to the Spratley s as does the People's Republic of 
China, the Republic of China and Vietnam. There are troops from the 
Philippines, the Republic of China and Vietnam on one or more is- 
lands. A clarification or reconciliation of these claims without delay 
would seem to be in the interest of all concerned. 

III. Indonesia 

Winds of change blow moderately in Indonesia, a land of 135 mil- 
lion people scattered among more than 3,000 islands extending East to 
West over a distance of 3,200 miles. Indonesia is the largest nation in 
Southeast Asia and the fifth most populous in the world. It is strate- 
gically located between Australia and the Asian mainland astride the 
sea lanes that link the Pacific and Indian Oceans. Continued un- 
hindered transit of shipping through these waters is important to U.S. 
interests and is vital to Japan, for whom these waters are a lifeline to 
Europe and the Middle East. 

Indonesia is a founder of the non-aligned movement. It is destined 
to play a leading role in Southeast Asia and throughout the developing 
world. Since Sukarno's fall from power a decade ago Indonesia has 
pursued a pragmatic approach to foreign policy. The stress has been 
on economic and social development as the best insurance of regional 
peace and security and the curbing of Communist influence. While 



7 



Indonesia frequently disagrees with U.S. policies, it has favored a 
cooperative approach toward the United States and other developed 
countries, opposing the confrontation tactics of many of the develop- 
ing nations. 

Led by men whose fear of Communism remains strong, Indonesia is 
taking a cautious approach toward relations with China and Vietnam. 
Although there are differences of viewpoint, the government of Presi- 
dent Suharto has no present plans to resume diplomatic relations with 
the People's Republic of China which were suspended following 
Sukarno's fall and President Suharto's rise to power. There are deep- 
seated fears over the impact that a Chinese diplomatic presence could 
have on the three million local Chinese, especially in view of 
the fact that nearly one-third technically hold citizenship in the Peo- 
ple's Republic of China. Indonesia is not concerned about direct 
action by China, but it is apprehensive over Hanoi's intentions, and 
is especially worried about the smuggling of arms into the country. 

As the most populous and powerful member of ASEAN, Indonesia 
sees the organization as a device to further regional economic progress. 
It is well aware that any attempt to bind ASEAN to military purposes 
would run against the tide in Southeast Asia. Indonesia contends that 
it is opposed in principle to any foreign bases in the region, but defers 
to the Philippines for handling the question of U.S. bases. 

Indonesia has absorbed what was once Portuguese Timor. Following 
the outbreak of fighting among political factions in Timor in August 
1975, the Portuguese lost effective control. A dominant position was 
assumed by the anti-Indonesia Fretelin group. Indonesia became con- 
cerned that an independent East Timor would constitute a threat to 
Indonesia's security by providing an opening for Communist influence 
and subversion. Indonesia began to provide assistance to local groups 
opposing Fretelin. Indonesian "volunteers" landed in Timor and 
rapidly pushed the Freteline forces out of the main population centers. 
A provisional government was established which petitioned Jakarta 
for incorporation of East Timor into Indonesia. Follwing Parliamen- 
tary apprval. East Timor formally became the 27th Province of In- 
donesia on July 17, 1976. 

There are currentlv infrequent reports of small-scale guerrilla ac- 
tivity by Fretelin units in isolated areas of East Timor, but Indonesian 
forces are reported to bo gradually bringing this under control. U.S.- 
supplied military equipment was used by Indonesian forces in the 
operation, without U.S. permission. That points up again a continuing 
problem in the enforcement of U.S. security assistance laws, a 
problem which deserves early attention by Congress and the new Ad-' 
ministration. 

The present partv system in Indonesia reflects an effort to remove 
the political focus from Indonesia's deep ethnic and religious cleav- 
ages and to establish program-oriented politics. Former parties which 
accentuated these cleavages haA'e been absorbed in two new organi- 
zations, the Development Union Partv (PPP), composed of various 
Moslem o-roupings, and the Indonesian Democratic Party (PDI). 
composed of two Christian and three secular groupings. Concurrently 
the government has actively supported a new federation of functional 
(youth, Labor, farmer, women) groups called Golkar. This organiza- 



8 



tion won 62.8 percent of the votes and 65 percent of the elected seats 
in the 1971 election and is generally regarded as the civilian succes- 
sor to the armed forces as the principal political base for the govern- 
ment. 

The National Parliament is composed of 360 elected and 100 ap- 
pointed members. Although Parliament seldom rejects government 
proposals it does have a voice in formulating them through prior 
committee consultations. The next parliamentary elections are sched- 
uled for May 2, 1977. The President will be elected for a five-year 
term in the succeeding year by the People's Consultative Assembly, 
which consists of Parliament and an equal number of appointed mem- 
bers. The People's Consultative Assembly will also at that time adopt 
broad guidelines for governmental policy during the following five 
years. 

Strongest opposition to the Suharto Government appears centered 
among adherents of former Moslem parties who claim that the most 
popular Moslem leaders have not been permitted to participate in lead- 
ership of the Development Union Party and that neither their elec- 
toral strength nor their views are properly reflected in the govern- 
ment. Criticism of the Suharto Government by these and other dis- 
satisfied elements has centered on corruption. There seems to be, how- 
ever, no basic disagreement with the Government's basic development 
policy goals. 

Indonesia, one of the world's poorest nations in terms of per capita 
income, is richly endowed with a diversity of natural resources. It has 
important desposits of oil, natural gas, nickel, copper and tin and is a 
major producer of rubber, lumber and other agricultural products. Al- 
though the United States is not as heavily dependent as most industrial 
nations on these resources, circumstances could make them more impor- 
tant in the future. The United States' principal ally in Asia, Japan, 
relies heavily on Indonesian energv and raw materials. American firms 
have invested approximately $2.5 billion in Indonesia, primarily in oil 
and mining, and Indonesia welcomes further outside investment. 
There are, however, severe restraints on the development of In- 
donesia's minerals and, to a lesser extent, timber resources. These are 
traditionally capital-intensive industries. For example, the Shell 
Group recently entered into a production-sharing agreement with the 
state-owned coal mining company to exploit extensive coal deposits in 
Sumatra for which the development costs are expected to exceed $1.2 
billion. Much of Indonesia's abundant mineral resources are located in 
the most inaccessible, primative parts of Indonesia. Everywhere devel- 
opment of Indonesia's resources is characterized by large capital ex- 
penditures. Even petroleum exploration and development co«ts, while 
not reaching North Sea levels, are far in excess of other OPEC mem- 
ber. While Indonesia has the potential resources which eventually 
could make it very strong economically, it is still some distance from 
self-sustaining growth. 

Oil dominates the Indonesian economv; and following the doubling 
of world oil prices in late 1973 and 1974, there was much optimism 
about Indonesia's prospects. This optimism was dealt a severe blow 
by problems encountered in 1975. In that vear there was decline in 
demand for Indonesia's exports ; a severe cash crisis in the state-owned 
oil company, Pertamina ; a drop in foreign investment ; and continued 
high levels of inflation. 



9 



Indonesia's oil revenues add only marginally to one of the world's 
lowest per capita annual income rates and Indonesia, which accounts 
for only about five percent of OPEC's oil production, has about half 
of OPEC's population. Ninety percent of Indonesia's oil is produced 
by U.S. companies. 

Pertamina is responsible under Indonesian law for managing all 
petroleum activities in the country, including exploration, produc- 
tion, refining and marketing. It owns and operates all of Indonesia's 
refineries, domestic distribution facilities, and a fleet of tankers 
and other vessels; it is also involved in a variety of non-petroleum 
activities. Under the leadership of its former president, Lt. Gen- 
eral Ibnu Sutowo, Pertamina became the leading edge of the gov- 
ernment's development schemes. Pertamina's financial crisis surfaced 
publicly in early 1975, when it began having difficulties rolling over 
some of its short-term obligations. Rather than risk default and the 
attendant damage to Indonesia's credit standing, the government step- 
ped in and assumed responsibility for Pertamina's debts, which to- 
taled more than $6 billion. Observers credit the government with 
effective handling of the Pertamina crisis but in the process Indonesia 
has greatly increased its debt burden. Debt service will approach the 
IMF "warning level" of 20 percent of total value of exports in the 
1979-80 period. As a fallout of the Pertamina crisis, President Suharto 
announced in his budget message of January 7, 1976, that government 
revenues would be increased by 7.6 percent, and that this increase 
would mainly be "acquired through reduction of profits gained by 
oil companies on each barrel they produce." There then ensued a com- 
plex series of negotiations with foreign oil companies, characterized 
in many instances by a confrontational atmosphere. Under the new oil 
contract terms, Indonesia achieved an 85-15 profit (formerly 65-35) 
which should increase its revenues by $350 million, or expressed an- 
other way, Indonesia's take increased an average of $1.88 per barrel of 
oil, from $6.19 per barrel to $8.07. 

In a separate, but related development, Indonesia recently has 
spoken in a number of international meetings on economic problems 
as seen by the Third World. Although its leaders continue to seek 
large infusions of foreign capital, they have become more responsive 
to domestic and foreign criticism that foreign investment amounts 
to "selling out the country." Because of the importance of primary 
products to Indonesia's economy, Indonesia is particularlv concerned 
about better terms of trade, higher value being added in producer 
countries, producer control of transport and marketing, and other 
portions of the platform of the new world economic order. Nonethe- 
less, while identifying strongly with the Third World, Indonesia has 
generally sought to play a moderating role in that group. 

Indonesia has had one of the highest rates of inflation in the world 
over the last five years. Although the rate has declined somewhat 
over the past 12 months, it is currently running at approximately 
20 percent per annum, significantly higher than neighboring coun- 
tries and trade competitors. As a consequence, the exchange rate of the 
rupiah, which was set at 415 to the dollar in 1971, is under considera- 
able pressure. Indonesia's net foreign reserves declined seriously dur- 
ing 1975, reaching a low point of $442 million in the third quarter of 
1975. Reserves have since staged a recovery, and as of mid- August 1976, 
were reported at $1.1 billion. 



10 



Indonesia has over 135 million people living at the subsistence level 
and a very poorly developed economic and social infrastructure. Its 
trade balance has been persistently in deficit, even after oil prices rose 
sharply in 1974. In the first Indonesian fiscal year after the oil price 
rise there was a trade deficit of $138 million which rose to nearly $1 
billion in the last fiscal year. The International Monetary Fund pro- 
jects a $1.8 billion deficit for the current fiscal year, which will be 
reduced somewhat by the increased take from oil profits. 

Despite increased earnings from oil exports, Indonesia continues to 
depend on large amounts of external aid. Economic assistance to Indo- 
nesia is coordinated through the Inter-Governmental Group on Indo- 
nesia (IGGI) , formed in 1967 with the purpose of helping the Suharto 
Government obtain external financing for Indonesia's development 
program. The IGGI is composed of fourteen countries, the World 
Bank, International Monetary Fund, and the Asian Development 
Bank. Through FY 1974 the U.S. and Japan each pledged under the 
umbrella of the IGGI to provide one-third of Indonesia's bilateral aid 
requests. In FY 1975 the U.S. abandoned the one-third formula with 
a significant reduction in its pledge. The World Bank has become the 
largest donor agency to Indonesia with a commitment target for FY 
1977 of $550 million. Japan, providing about $140 million this year, 
is the largest bilateral donor. 

There is no end in sight to Indonesia's need for external assistance, 
according to the development assistance community. The U.S. has pro- 
vided some $2.2 billion in assistance to Indonesia since independence. 
It appears to me that the large volume of assistance, especially food 
aid, has served as a crutch which has helped Indonesia avoid facing up 
to its own internal problems, particularly those relating to food pro- 
duction. By providing subsidized food to make up the self-sufficiency 
gap, the United States and other aid donors have enabled Indonesia to 
avoid making hard choices in national priorities of development. 

The contrast between Indonesia's vast numbers of poor and the few 
rich is typified in Jakarta where a short distance off broad boulevards 
lined by huge new office buildings and hotels, lie wretched slums. In the 
seven years since my last visit to Indonesia there does not appear to 
have been any progress toward narrowing the gap between the rich 
and the poor. If anything, the disparity has been made more glaring, 
at least in the capital, by a facade of modernity and progress. 

There is no land shortage in Indonesia, only an overconcent ration 
of population. Two-thirds of its population live on two islands, Java 
and Bali. Java, with 1,500 persons per square mile, is one of the most 
densely populated areas in the world. However, there is no program at 
present to encourage migration to the less developed islands and the 
population pressures on Java and Bali mount. Indonesia is still 
dependent on imports to meet its needs for rice. Rice imports will total 
about one million tons this year, with 350,000 tons to come from the 
United States financed under the PL 480 program or on long-term 
credits. 

There is an effective population planning program. It is said that 
five years ago the annual population growth rate was three percent ; 
has now been reduced to 2.3 percent and the goal is to reduce it to 1.8 
percent by the end of 1979. There are strong social pressures to partici- 
pate in the birth control program through local "Mother's Clubs." 

With the advent of the Suharto Government in 1967, the United 
States resumed military assistance. The first post-Sukarno era U.S. 



11 



military assistance project consisted of a modest civic action program 
aimed at displaying U.S. support for the new regime, a program to 
assist the armed forces to rehabilitate roads, ports, and irrigation 
systems. Military grant aid in FY 1967 amounted to 'only $2.7 million. 
In 1970, following President Nixon's visit to Indonesia and support 
from k for the U.S. policy in Cambodia, U.S. military assistance mul- 
tiplied and changed in character. A 1971 interagency study set as a 
planning guide $25 million in MAP grant aid for each of the next five 
years, and aid continued at approximately this level for several years 
until it was reduced following general cutbacks in military aid by 
Congress. 

Today, the U.S. Diplomatic Mission to Indonesia is staffed by a 
total of 231 Americans. The military mission of 70 has increased more 
than five- fold since my last visit in 1969. The U.S. mission, in my 
judgment, is overstaffed and should be trimmed back substantially. 

In summary, American relations with Indonesia are good but the 
relationship is not as close as in the initial post-Sukarno years and it 
is likely to become more distant in the days ahead. 

IV. Malaysia 

Although Malaysia has a strong Western orientation, the gov- 
ernment's official policy has been to cultivate the Third World and 
to take an active part in nonaligned affairs. Since 1971, it has also 
advocated creation of a zone of peace, freedom and neutrality in South- 
east Asia and supported the proposal for an Indian Ocean peace zone. 
Non-alignment and support for zones of peace and neutrality are in- 
tended to insulate Malaysia, if possible, from the effects of great power 
rivalry in the region and in the world at large. They are also intended 
to give the government some leverage on international economic 
developments. 

In 1960 the Malayan "emergency" was declared to be officially at an 
end, although long before this Malaysian Communist Party (MCP) 
Secretary Chin Peng had withdrawn the remnants of his terrorist 
forces across the border into Thailand. The MCP set out in 
1968/69 to re-establish itself in Malaysia by sending small 
groups of armed terrorists back across the border to attack govern- 
ment security forces and to activate old underground networks in the 
cities and new Chinese settlements. The MCP has had some success in 
its campaign, but increased government counter-insurgency efforts and 
a split in the MCP itself have slowed this activity markedly. It is 
estimated that there are some 3,000 active and armed terrorists in all. 
At present, the terrorists are a nagging and expensive annoyance but 
they do not pose a threat to the government or to the daily life of the 
country at large. 

The U.S. has no major programs in Malaysia. There has never been 
an aid program, a military assistance agreement or bases. The Peace 
Corps with approximately 60 volunteers is the largest U.S. program. 
It is designed to supply experts to fill gaps in government programs 
in education, health and agriculture pending the training of Malay- 
sians. In addition to the Peace Corps, the United States has a small 
military training program through which 40 to 60 Malaysian service 
personnel are sent to the U.S. each year for training. There also is a 



79-905 O - 76 - 2 



12 



military credit program which amounted to $17 million in fiscal year 
1976 and will total approximately $5 million in fiscal year 1977, financ- 
ing items such as F-5E and F-5JB aircraft, C-130 transports, helicop- 
ter- and a rmored cars. 

Relations between Washington and Kuala Lumpur are cordial but 
not intimate. Prime Minister Datuk Hussein ()nn has publicly ex- 
pressed his desire to Bee a continued l .S. economic and diplomatic 
presence in Southeast Asia but his government is also conscious of the 
need to preserve its distance from ail of the major powers. It main- 
tains correct relations with both the Soviet Union and the People's 
Republic of China and has offered technical assistance to Vietnam. 
It sent an ambassador to Hanoi in October. Although Malaysia is 
concerned about Vietnam, it sees no alternative to bringing it into 
association with the other nations of Southeast Asia. 

The United States is one of Malaysia's most important customers, 
taking, for example, 40 percent of its most significant export, natural 
rubber. Bilateral trade in 1975 involved exports to this country of 
rubber, tin, palm oil and timber products amounting to $536 million. 
Malaysia imported $394 million worth of U.S. machinery and trans- 
portation equipment, manufactured goods, chemicals and other prod- 
ucts during that same year. U.S. investment in Malaysia rose to an 
estimated $450 million in 1975. The main component is petroleum ex- 
ploration and exploitation but the investments also involve extensive 
participation in the electronics industry. 

All signs point to continued economic expansion. Financial reserves 
are ample, the country is a preferred borrower. The security problem 
is currently manageable. If peace and stabilit} T in the region continue, 
Mala} T sia prospects are encouraging for the foreseeable future. 

V. Singapore 

Singapore, a city state of some 3 million, has utilized its geographi- 
cal location, its excellent harbor, and a skilled populace to reach a 
level of development unparalleled in Southeast Asia. Singapore's 
$2,500 per capita GNP is exceeded in Asia only by Japan. Its well- 
being is dependent on the state of the world economy and on the 
cooperation of its neighbors, Indonesia and Malaysia, which provide 
the goods and markets for the Singapore entrepot and the raw mate- 
rials for Singapore's factories. 

Seventy-six percent of Singapore's population are descendents of the 
Chinese migrants who for centuries have moved to Southeast Asia in 
search of greater opportunity. Both Malaysia and Indonesia also have 
Chinese minorities (36 percent in Malaysia, about three percent in 
Indonesia) which dominate their commerce and are visibly wealthier 
than the ethnic majorities. In both countries there is a heritage of mis- 
trust and tension between the Mai ay /Indonesian and the ethnic Chin- 
ese communities, reflected in varying degrees in the attitudes of their 
governments toward Singapore. 

Although Premier Lee Kuan Yew. who has been in power for seven- 
teen years, visited Peking last May. Singapore has not yet established 
formal diplomatic relations with China, stating that it will not do so 
until after Indonesia has acted. Singapore is an active member of 
ASEAN and lias pressed for the elimination of trade barriers and 
greater economic cooperation, to the discomfort, in particular, of less 
economically developed Indonesia. Internationally, Singapore is osten- 



13 



sibly non-aligned. Its commitment to free enterprise and its reliance on 
the world market, however, have given its policies a generally pro- 
Western bias. In its security relationships, for example, Singapore 
has until recently looked primarily to the Five-Power Defense Ar- 
rangement (FPDA) that links it — along with Malaysia — to Britain, 
Australia and New Zealand. Last March, Britain completed with- 
drawal from its naval base in Singapore. However, a small New Zea- 
land Army unit is still based there. 

Singapore's vulnerability, especially to outside economic pressures, 
requires the government to exercise special care in not antagonizing 
other countries unnecessarily. For example, the dependence of the huge 
Singapore oil refining complex, third largest in the world, on Middle 
East crude is a prime element in shaping Singapore's cautiously neu- 
tral position toward Arab-Israeli issues. Prime Minister Lee has been 
outspoken about the importance of maintaining a great power balance 
in the region. He believes that the Soviets will not voluntarily limit 
their presence in the area and that, therefore, there should be no pres- 
sure on the United States to leave the region. Indeed, Lee has implied 
that it is necessary to encourage the United States to maintain a suit- 
able presence both in Southeast Asia, as well "as in the Indian Ocean. 

The attitude of Lee and his government toward the presence of the 
major powers in Southeast Asia stems in part from Singapore's posi- 
tion as an ethnic Chinese city-state. Aware of the potential pull of the 
Chinese homeland, Lee has been reluctant to follow the Malaysians, 
Thais and Filipinos in establishing relations with Peking. On the other 
hand, because Singapore is situated in an area dominated ethnically 
by Malays, Lee prefers the region to be open to the peaceful competi- 
tion of the great powers provided no single power is dominant. 

Since the communist victory in Indochina, Lee has looked to the 
United States for support in the security field. He is especially con- 
cerned over the implications of the insurgency in Malaysia. Modern 
equipment has been procured in the United States on commercial terms. 
Singapore recently contracted to purchase a squadron of F-5E's with 
air-to-air missiles. Singapore's decision to acquire a substantial portion 
of its military equipment and service requirements from the United 
States is consonant with the overall cordial bilateral relationship. Sing- 
apore is not only a major trading and investment partner of the United 
States, it also grants this Nation access to its naval and air facilities. 
Soviet ships also bunker and replenish at Singapore's docks. Chinese 
ships also stop there. 

Because of the "openness" of the economy, Singapore is extremely 
vulnerable to foreign trade fluctuations. The manufacturing and for- 
eign trade sectors have been seriously impacted by the world recession 
and the shrinkage in international trade. But barring unforeseen cir- 
cumstances, there should be a six to eight percent increase in economic 
growth in 1976. Inflation has not been a problem recently, amounting 
only to three percent in 1975. 

Singapore maintains one of the most attractive investment climates 
in East Asia. There are no significant limitations on foreign equity par- 
ticipation or in the employment of expatriate management staffs. Fi- 
nancial inducements, usually in the form of tax forgiveness, are avail- 
able to those companies engaged in lines of production involving high 
technology and intensive capital investment. Eesponding to these en- 



14 



ticements and to the advantages offered by Singapore's location and 
it- efficient administration, American private investment stands at 
nearly $1 billion. It constitutes the island's single largest source of pri- 
vate foreign investment. It is estimated that one-fourth to one-third 
of the Americans in Singapore are there in connection with oil drilling- 
operations in the area but. because of a falloff in activity, their popula- 
tion may be reduced by one-half in coming years. Twenty drilling rigs 
are now in mothballs. 

Singapore is eligible for preferences under U.S. tariff laws and in 
response to a request of the Singapore government, the product eligi- 
bility rules were broadened recently to take Singapore's entrepot econ- 
omy into account. 

VI. Papua New Guinea 

Newly independent Papua New Guinea is an important bridge be- 
tween Southeast Asia and the Southwest Pacific, with 85 percent of its 
land area made up of the eastern half of the massive island of New 
Guinea. Irian Jaya, the western half, is a province of Indonesia. 

American missionaries have been in New T Guinea for decades and 
more than 2,500 are there today. Over a million American servicemen 
went through Papua New Guinea during the Second World War and 
they are remembered with fondness. General Douglas MacArthur is 
recalled with special respect. 

While the United States does not have any vital interests in Papua 
New Guinea, the nation plays a role in U.S. objectives for the Pacific. 
U.S. strategic interests in the area are supported by the maintenance 
of harmonious and cooperative relationships between Papua New 
Guinea and Australia and Indonesia ; the denial of bases and other local 
facilities to potential enemies; and the continuation of the country's 
political unity and stability. 

The U.S. Mission is small, highly regarded and effective. Papua 
New Guinea's leadership is well disposed toward the United States, 
and has pursued moderate internal and foreign policies. There is no 
U.S. aid program, not even a Peace Corps presence and in my judg- 
ment it should remain this way. 

Papua New Guinea became a sovereign nation on September 16, 
1975. Its leaders have since demonstrated a capacity to lead the country 
effectively even when confronted with a number of difficult problems, 
including a secessionist movement on the copper-rich island of 
Bougainville. Several important economic developments have occurred 
during the past year. For Papua New Guinea, the most crucial was 
an aid commitment by the Government of Australia for $1.2 billion 
over the next five years. The Government of Papua New Guinea has 
encouraged direct foreign investments under increasingly hospitable 
terms. Moreover, during the period of economic stagnation and decline 
in revenues from basic commodities, not once did the Government at- 
tempt to align itself with the more extreme positions of the Third 
World to curtail supplies or attempt to manipulate the market by 
artificially created higher prices. 

Papua New Guinea is one of the world's least tapped sources of 
natural resources. Copper, gold, silver and zinc are some of the min- 
erals known to exist in commercially profitable quantities. Gas has 
been found, and oil is thought to be there. A wide variety of tropical 



15 



produce can be grown. Access to tuna fishing grounds and timber 
resources are eagerly sought after by foreign companies. The ratio 
of resources to its population is very favorable. With fewer than three 
million people and a population density of seven persons per square 
mile, "Papua New Guinea is much more favorably endowed than most 
developing countries. Economic aid from Australia has provided the 
basis for the beginnings of the infrastructure without significant 
international indebtedness. 

The present government has had almost five years' experience in 
running the country ; the country's political institutions are operative ; 
the army has stayed out of politics and is loyal to the government; 
the country is at peace with its neighbors ; its international problems 
are minor; there is a strong egalitarian tradition among the people; 
and there are no ideological hangups. 

On the other hand, Papua Xew Guinea suffers from difficult divisions 
of geography and language and from wide variations in degree of 
development. The rapid pace of modernization is leaving large sec- 
tions far behind, with sophisticated political and economic systems 
imposed on a primitive tribal society. Only 15 percent of the people 
are literate. The leadership of the country is painfully small in num- 
ber, and the supply of trained manpower is quite inadequate. The 
people have high expectations. Tremendous opportunities which are 
available to trained young people are leading them to focus more on 
their own careers than on the country's future. An elite has been 
created which could easily become divided from the people. 

The government is beginning to display greater receptivity to for- 
eign private investment. Several large projects are now pending and, 
if approved, they will eventually provide tax revenue, export earnings, 
and jobs. The lead time for most of them is six to ten years, but they 
will require construction workers to build roads, bridges and houses 
before becoming operational. The projects now under construction 
include a U.S. Steel sponsored gold mine ($200 million), three copper 
mines which will be developed by international consortia, and a fish 
canning project. In addition, natural gas exploration is being con- 
ducted by a Japanese consortium and oil drilling is taking place in 
three localities under the aegis of a U.S. /Australian/British consor- 
tium. Further down the road is an enormous hydro-electric project 
which will require billions of dollars to develop but which is expected 
to create large amounts of relatively cheap electricity. 

Papua Xew Guinea is an inward-looking country absorbed in its 
own affairs. It is at peace with its neighbors and has no pressing prob- 
lems of foreign policy. Its basic policy has been described as one of 
having "no friends and no enemies." The government does not want 
to be involved in great power struggles and does not want aid from 
the United States, the Soviets or the Chinese. "We are neutral to 
everybody;" a national leader said to me, "if you come as friends, we 
are not interested in ideology." The nations most relevant to Papua 
Xew Guinea's future are Australia, Indonesia and Japan. Australia 
is important because of the long and close association, a very large aid 
program and the significant role of Australian business in the econ- 
omy. Indonesia is important because it shares the boundary which 
divides Papua Xew Guinea from the Melanesians of Irian Jaya. Japan 
is of growing importance as a main competitor with Australia in the 



16 



nation's economic relations. Papua New Guinea also has close ties 
with the other small Pacific island countries. Ethnic and emotional 
considerations enter into these ties but in economic terms, it is becom- 
ing increasingly evident that the Philippines and Indonesia will be of 
far greater significance than the coral atolls of the Pacific. 

Papua New Guinea is pursuing a foreign policy of fostering a cor- 
ivct friendship with larger countries and avoiding the making of 
enemies. It is likely to stay somewhat apart from the Afro-Asian bloc 
countries, and to abstain from involvement in issues not directly af- 
fecting the South Pacific. It has diplomatic relations with both the 
Soviet Union and China, but there is concern over the possibility of a 
Soviet presence in Tonga and the Chinese presence in Western Samoa. 

With its great and developed natural resources and its proximity to 
resource-poor Japan, it is also concerned with that nation's economic 
dominance in the region. There is interest in having the United States 
and other nations increase their economic involvement as a balancing 
factor, "Investment possibilities are here," a leader said to me : "Men- 
tion anything, we have it here." Papua New Guinea is, in truth, a 
storehouse of vast potential in a world of dwindling resources as well 
as a bridge between Southeast Asia and Southwest Pacific. It wants 
outside capital for resource development, but only on its terms. 

While it is a new nation with many problems, Papua New Guinea 
is taking the long view in its relations with the world. "We are 
friends," Sir Maori Kiki, the Acting Prime Minister said to me. I 
hope that the relationship between our countries will remain cordial. 
There are no outstanding contentious issues between us and there exists 
a wide basis of understanding. 

VII. Concluding Comments 

Since this report completes the general survey of U.S. policy in 
Asia and the Pacific which I began last July, I will conclude with a 
number of comments about certain specific matters which relate to 
that policy. 

American policy in Asia is now grounded on the fact that the 
United States is not an Asian power but a Pacific power. The differ- 
ence is more than semantic. It is the difference between a sensible ac- 
ceptance of the realities of Asia and dangerous illusions of military 
omnipotence. What takes place in the vast region of Asia, of course, is 
of concern to Americans. But concern and control are quite different 
matters. Simply stated. America's principal long-range interests in the 
Pacific are to discourage domination of the region by any single power, 
to maintain friendly relations with China, Japan and other nations 
and to lessen tensions which could trigger either a local or a great 
power conflict in the area. 

In my estimation the United States position in Asia and the Pacific 
is more favorable than it has been since the end of World War II : 
There is no war. 

We enjoy good relations with all nations except North Korea 
and the countries of Indochina, which the Executive Branch has 
chosen to ignore. 

After the tragedy of Indochina, both we and the nations of the 
region have a better understanding of what it takes to live in 
peace in a diverse world. 



17 



There are no American troops in Southeast Asia or anywhere 
else on the Asian mainland except in South Korea where 40,000 
remain. 

The economic burden of U.S. political involvement in the area 
has lessened. 

The foremost problem for American policy regarding Asia is to 
complete the normalization of relations with the Peopled Republic of 
China. 

The partnership between the United States and Japan remains as a 
fundamental pillar of American policy in Asia. It must be a partner- 
ship of equality; the post-war era of patron-client is over. Japan's 
continued trust in the validity of the United States security commit- 
ment is essential to the maintenance of stability throughout the region. 
This country ought not to provide the grounds for Japanese to 
doubt the U.S. security guarantee or to make a significant change 
in their domestic policy. A Japan embarked on major military ex- 
pansion would unsettle all of Asia. U.S. -Japan relations are good but 
they could be better and it behooves us to avoid the further shocks of 
sudden policy shifts without notice. 

Korea is a time bomb which must be defused. The United States' 
objective should be to try to bring about a settlement between the two 
Koreas and, in the interim, to ease tensions and lessen the possibility 
for a resumption of hostilities. U.S. policy should not be hostage to any 
particular government in Korea, or anywhere else for that matter. 
Our forces in this last U.S. bastion on the Asian Mainland should be 
reduced over a period of time, after consultation with Japan, and all 
nuclear weapons should be removed from the peninsula. 

In Southeast Asia, the foremost task for U.S. policy remains to 
adjust to the realities in Indochina. The current policy of opposition 
to trade and diplomatic relations with Vietnam and Cambodia and to 
Vietnam's application for membership in the United Nations, as well 
as the failure to send an Ambassador to Laos has something in it of 
the ostrich complex. The fact is that just as China was not ours to lose 
in 1949, neither was Indochina a quarter of a century later. It is time 
that the United States act toward the governments of Indochina in 
a spirit which seeks to heal the wounds of war and therefore, enhances 
the prospect for a final accounting of the missing in action. Vietnam 
is a major force in Southeast Asia and it is in this nation's long- 
ran £e interest to accommodate to that fact. 

The remnants of a lonsr-time U.S. military involvement, a smoulder- 
ing insurgency in the Northeast, a genuine fear of North Vietnam's 
intentions, and the continued existence of the SEATO treaty com- 
mitment to Thailand, all add up to a sensitive and volatile situation 
for the United States in Thailand. There should be no resumption of 
the vast array of U.S. activities once carried out in Thailand, and 
the SEATO commitment should be terminated. 

The era of U.S. military adventure on the Asian Mainland is over. 
We now have a more realistic view of what, as a practical matter, can 
and cannot be done on that continent. We know that it is not possible, 
or even desirable, to remake ancient cultures in our own image. There 
is a sober realization of the limits of America's resources and power. 
As was true of America in the past, the America of the future will 
be the beacon to the world, not because of military might or foreign 



18 



aid bul because of what it stands for in furthering aspirations for 
freedom and human decency. 

There is an agenda of unfinished business in Asia and the Pacific, 
to be sure. Bu1 i he problems arc manageable. What is needed is the will 
to clear away the last relics of out-dated policies, to learn from the 
past, and to face up to the present and the future. 



APPENDIX 1 



Sessfon 88 } COMMITTEE PRINT 



THE END OF THE POSTWAR ERA 



TIME FOR A NEW PARTNERSHIP 
OF EQUALITY WITH JAPAN 



A REPORT 

BY 

Senator Mike Mansfield 
Majority Leader, United States Senate 

TO THE 

COMMITTEE ON FOREIGN RELATIONS 
UNITED STATES SENATE 

REPORT NUMBER ONE 




AUGUST 1976 



Printed for the use of the Committee on Foreign Relations 



U.S. GOVERNMENT PRINTING OFFICE 
WASHINGTON : 1976 



(19) 



20 



COMMITTEE ON FOREIGN RELATIONS 



JOHN SPARKMAN, Alabama, Chairman 



MIKE MANSFIELD, Montana 
FRANK CHURCH, Idaho 
STUART SYMINGTON, Missouri 
CLAIBORNE PELL, Rhode Island 
GALE W. McGEE, Wyoming 
GEORGE S. McGOVERN, South Dakota 
HUBERT H. HUMPHREY, Minnesota 
DICK CLARK, Iowa 
JOSEPH R. BIDEN, Jr., Delaware 

Pat M. Holt, Chief of Staff 
Arthur M. Kuhl, Chief Clerk 

(II) 



CLIFFORD P. CASE, New Jersey 
JACOB K. JAVITS, New York 
HUGH SCOTT, Pennsylvania 
JAMES B. PEARSON, Kansas 
CHARLES H. PERCY, Illinois 
ROBERT P. GRIFFIN, Michigan 



21 



CONTENTS 



Pftgtt 

Letter of transmittal v 

Text of report 1 

I. Importance of the United States-Japan relationship 1 

II. Foreign policy and security matters 2 

(a) U.S. bases and personnel 8 

1. Okinawa 9 

III. Economic relations 10 

IV. Concluding observations 11 

V. Recommendations 13 

Appendix 15 

1. Text of the United States-Japan Mutual Security Treaty 15 

2. Text of the Status of Forces Agreement With Japan 21 

3. Text of Japan's Defense "White Paper" 41 

4. Data concerning U.S. military personnel and bases in Japan 53 

(HI) 



LETTER OF TRANSMITTAL 



August 2, 1976. 

Hon. John Sparkman, 

Chairman, Committee on Foreign Relations, 

U.S. Senate, Washington, B.C. 

Dea* Mr. Chairman : As you know, with the Committee's permis- 
sion, during the July recess I made an official trip to Japan to study 
major United States foreign and security problems in the Far East 
with emphasis on United States relations with Japan and Japanese 
attitudes concerning a number of matters of mutual interest, such as 
issues involving the People's Republic of China, the Soviet Union, 
and Korea. I am hereby transmitting my report on that trip. A con- 
fidential report has been sent to the President. 

I was in Japan from July 9 through July 16, when I returned to 
Washington. While there I received a thorough briefing from Ambas- 
sador James D. Hodgson and his staff concerning political, economic, 
and security matters. I also had an informative briefing from Lt. Gen- 
eral Walter T. Galligan, USAF, Commander, U.S. Forces Japan, and 
his staff concerning the status of U.S. military bases and personnel in 
Japan. Both Ambassador Hodgson and General Galligan were most 
helpful and cooperative. 

I met with a number of officials of the Japanese government, each 
of whom was most generous with his time. Among those with whom 
I held discussions were Prime Minister Takeo Miki; Deputy Prime 
Minister and Director General of Economic Planning, Takeo Fukuda ; 
Foreign Minister Kiichi Miyazawa; Director General of the Japan 
Defense Agency, Michata Sakata; and Finance Minister Masayoshi 
Ohira. My conversations with each official covered a wide range of 
subjects and thus gave me a broad cross section of opinion within the 
Japanese government on many matters of common interest. 

In addition to these meetings, I had an opportunity for informal 
discussions with Deputy Minister of Foreign Affairs Keisuke Arita 
and several of his colleagues, former Japanese Ambassadors to the 
United States Takeshi Yasukawa and Nobuhiko Ushiba, and others. 

I was accompanied on the trip by Mr. Francis R. Valeo, Secretary 
of the Senate, and Mr. Norvill Jones of the Committee staff. In order 
to obtain further information concerning the Korean problems and 
the Taiwan issues, as they relate to Japan, I sent Mr. Valeo to Korea 
and Mr. Jones to Taiwan following the completion of my schedule in 
Japan. At my request, Mr. Jones also inspected the U.S. military base 
situation in Okinawa on his wav back to Washington. 

I wish to express my appreciation to the Department of State for 
making my travel arrangements; to Ambassador Hodgson and his 
staff for their assistance and many courtesies; to General Galligan 
and his staff for the briefing and other helpful information; to the 
Congressional Research Service of the Library of Congress for as- 
sembling background materials; to the Department of Defense for 
assistance in the field to Mr. Valeo and Mr. Jones; to Mr. Valeo, who, 
as a former consultant to the Committee on Foreign Relations, has 
accompanied me on many past missions abroad, and to Mr. Jones of 
the Committee staff, who has also accompanied me on a number of past 
missions, for their assistance in connection with the trip. 
Sincerely yours, 

Mike Mansfield. 

(V) 



(23) 



THE END OF THE POSTWAR ERA— TIME FOR A NEW 
PARTNERSHIP OF EQUALITY WITH JAPAN 



I. IMPORTANCE OF THE UNITED STATES- JAPAN RELATIONSHIP 

One hundred and twenty-three years ago Commodore Matthew 
Perry led four U.S. naval vessels into Tokyo Bay, opening J apan to 
the outside world after more than two centuries of isolation. A new 
relationship began for our two countries, a relationship which, over 
the years, has moved through a broad spectrum, from friendship to 
war "and back to friendship again. It is commonplace to say that there 
is a special relationship between our two countries. But this is an in- 
adequate term to describe the interdependence and mutuality of inter- 
ests that have come to bind our countries together. A stable Japan, 
which poses no military threat to the nations of Asia, is essential to 
stability and peace in thie Pacific and the world. Although it lacks 
military power, Japan is the world's third ranking economic power 
and second only to the United States among the industrial democracies. 
In this sense, it is a factor to be reckoned with in its capacity to in- 
fluence the flow of international events. 

Aside from the umbrella of security provided by the mutual security 
treaty, the United States relationship is essential to Japan as a source 
of food, raw materials, and as a market for J apan's industrial output. 
To the United States, far less dependent on world markets for eco- 
nomic well-being, the Japanese tie is essential in a different, but no less 
important sense. It is a fundamental pillar in present U.S. foreign 
policy whose goal is continued stability in the Western Pacific. Geog- 
raphy and history, combined with the genius and industry of the 
Japanese people, have made Japan a keystone of that policy. The 
waters of the Pacific lap the shores of all the world's major powers — 
the United States, the Soviet Union, China, and Japan — and it is in 
the environs of the latter country that the interests of all are most 
entwined. For this nation which has fought three wars in Asia within 
a o-eneration, the role of Japan in the structure of peace in the Pacific 
will continue to be of utmost importance in the years ahead. It is 
in the interest of both peoples to work at strengthening this unique 
relationship. 

The visit by Commodore Perry began what became the first of a 
series of ups and downs in relations between Japan and the United 
States. Unlike our ties with Great Britain, language and cultural dif- 
ferences have been obstacles to mutual understanding between Japa- 
nese and Americans. Trust does not come easy under these circum- 
stances. Extraordinary efforts by both sides are necessary. As Pro- 
fessor Edwin Reisehauer, former U.S. Ambassador to Japan, wrote 
recently, this difficulty is compounded by the fact that: "We for 

... (l) 



(25) 



2G 



2 

our part have lingering traces of the unquestioned nineteenth century 
assumption that the West was in all ways superior to the rest of the 
world. 5 ' 

Since the post- World War II occupation began, Americans have 
had a tendency to take the Japanese tie for granted. The Nixon 
"shocks" arising out of a failure to consult on measures to support 
the dollar, to suspend soybean exports, and on the new China policy 
have not been forgotten. There should be no more such unnecessary 
and undiplomatic treatment of our closest major ally in the Pacific. 

II. FOREIGN POLICY AND SECURITY 

Japan is an island nation. That, and an astute foreign policy have 
relieved its people of anv discernible fear of attack from abroad. It 
enjoys good relations with all of the major powers and diplomatic and 
commercial relations with practically every nation of the world, A 
security commitment from the United States permits the spending of 
less than one percent of its gross national product for defense pur- 
poses. Japan's foreign policy, which is built around the umbrella of 
the security pact with the United States, has paid rich dividends by 
freeing resources for economic growth that would otherwise be de- 
voted to unproductive military spending. 

Article IX of the Japanese Constitution is the foundation of Ja- 
pan's external policies. It states : 

Aspiring sincerely to an international peace based on justice and order,, 
the Japanese people forever renounce war as a sovereign right of the nation and) 
the threat or use of force as means of settling international disputes. 

In order to accomplish the aim of the preceding paragraph, land, sea and air 
forces, as well as other war potential, will never be maintained. The right of bel- 
ligerency of the state will not be recognized. 

Within these constraints, Japan has, like a Phoenix, risen from the 
ashes of defeat and humiliation into a unique position on the interna- 
tional scene. There is widespread public sensitivity among the Japa- 
nese to all military issues, particularly to those involving nuclear 
weapons. Japan's status as an unarmed, economic g^iant in a world 
bristling with weapons of mass destruction has contributed greatly to 
the easing of bitter memories of Japanese militarism, to the opening 
of doors to Japanese economic dynamism, and to a more stable inter- 
national environment, notably in Northeast Asia. 

Japan maintains only a small Self -Defense Force consisting of some 
240,000 men. Recruitment for even this small force is difficult. At bot- 
tom, Japan's real security, aside from the U.S. commitment, is en- 
trusted to effective foreign policies. 

Following in the path of the Nixon visit to Peking, Japan estab- 
lished diplomatic relations with the People's Republic of China on 
September 29, 1972, but a Sino- Japanese peace treaty to end the formal 
state of hostilities from World War II has not yet been concluded. It 
is stalled by a dispute over Chinese insistence on an "anti-hegemony" 
clause. Although agreeable in principle to such a clause, the Japanese 
confront the fact that the Soviet Union has indicated that such lan- 
guage in a treaty would be considered an unfriendly act. Negotiations 
with China have been at a stalemate since last year. Meanwhile, trade 
and other relations with China continue, with $2.5 billion in exports 
to China and $1.5 billion in imports from China in 1975, three times 
the level of trade in 1970. 



27 



3 

Under the "Japanese formula/' Japan also maintains economic and 
cultural relations with Taiwan. The nation's interests on Taiwan 
are represented by the unofficial organization designated the "Japanese 
Interchange Association," which is headed by a former Japanese am- 
bassador. The association is financed primarily by private funds. 
Taiwan's interests in Japan are represented by the Far East Associa- 
tion. The personnel of neither organization have any form of diplo- 
matic status or immunity. 

Other countries which recognize the People's Republic of China 
look after their trade or cultural interests in Taiwan through varying 
types of organizations: Great Britain through the Anglo-Taiwan 
Trade Committee; Germany through the Goethe Institution; Spain 
through the Cervantes Center; and the Philippines through the Asian 
Exchange Center. Taiwan has developed a web of relationships in 
order to handle specific circumstances which may be involved with 
any individual country. 

The "Japanese formula" has worked well for Japan. Since formal 
diplomatic recognition of the People's Republic of China, trade, in- 
vestment, and travel between Taiwan and Japan have all expanded. 
Trade has more than doubled — to $2.5 billion last year — and accounts 
for 22 percent of all Taiwan's trade (the U.S. accounted for 31 percent 
of Taiwan's trade in 1975— $3.47 billion) . 

With regard to the Soviet Union, Japan has yet to conclude a World 
War II peace treaty, the matter being snagged over four islands north 
of Hokkaido claimed by both Japan and the Soviet Union. 1 No break 
in the impasse is in sight. There is in Sapporo, the principal city of 
Hokkaido, a "Movement for the Reversion of the Habomais." The 
agitation which this group fosters from time to time is tempered by 
the realization that the Soviet Union is in a position to curtail fishing 
rights wmich are of significance to the Japanese. Moreover, there is 
a substantial general trade with the Soviet Union, although it is some- 
what less than commerce with China. Last vear exports to the U.S.S.R. 
were $1.62 billion and imports $1.17 billion. With regard to the status 
of Japanese joint ventures with the Soviets in the development of 
Siberia, many projects have been discussed but only two, natural gas 
and timber, have made progress. Others seem to be "fading away " as 
one Japanese official put it, due in part apparently, to the reluctance 
of U.S. private interests, which were also involved, to pursue them 
at this time. 

Japanese officials are concerned about the increase in Soviet naval 
activities in the Western Pacific, citing in particular an increase in 
the activities of intelligence vessels. While I was in Japan, Soviet 
ships and ASAV aircraft were conducting maneuvers in the Okinawa 
area. Insofar as Japan is concerned, the increase in Soviet naval opera- 
tions in the Western Pacific is viewed, one involved official said, as 
constituting "a potential threat to Japan— but it is not overt yet." He 
went on to say that the Soviets were also engaged in a "cultural 
offensive." 

p Developments in the situation on the Korean Peninsula are reflected 
m , : Ta P. an ;. ln P art , through the large Korean communitv in Japan, 
which is div ided in its sentiments about the problems of the Peninsula. 

1 The Islands in dispute are : Etorofu, Kunashiri, Shikotan, and Habomai. 



79-905 O - 76 - 3 



28 



4 

Some favor (lie North and others support South Korea and Japan is 
frequently drawn into difficulties arising from this division. There is 
also a deep-seated historic concern in Japan with the impact of devel- 
opments in Korea on Japanese security. 

The traditional overland invasion route to Japan has been via the 
Peninsula. While this route has also operated in the other direction,, 
the fact is that in present circumstances both Soviet and Chinese mili- 
tary power which might approach by way of Korea appear over- 
whelming to Japan. Those Japanese given to nightmares in this 
matter, moreover, note that if the Koreans of the North and South 
should ever get together, their combined armed strengths would be 
four or five times greater than Japan's lightly armed self-defense 
force. 

It is clear that a military conflict between North and South Korea 
could pose a threat to Japan especially if it were to draw in. great 
powers as would be almost inevitable. Indeed, a breakdown of order 
in South Korea alone would create serious difficulties for the Japanese 
who have developed a major trading relationship of about $4 billion 
annually with Seoul 2 and, in addition, have large investments in 
Korea. 

There is little that is apparent in the current Korean situation to 
feed these Japanese anxieties. The Republic of Korea, functions under 
a government which is for all practical purposes, a military-bureau- 
cratic authoritarianism under the control of President Park Chung- 
Hee. Two 3-ears ago there was still protest and agitation for political 
freedom on the part of intellectuals, religious groups and others but 
that has now ceased. Civil liberties are in abeyance and fear of prison 
or death has silenced the opposition. The Park Administration is said 
to have considerable popular support. Certainly, it has the backing of 
the military establishment and the acquiesence if not the active sup- 
port of major industrial and commercial groups. It has, of course,, 
official support from the United States and, probably, from other 
foreign sources. The government, in short, gives the appearance of 
stability. 

Moreover, the South Korean economy has been converted into a 
modern establishment which is second only to Japan among Asian 
nations. Its peoples are industrious and dexterous and, in the space 
of two decades, have developed a great range of modern industrial 
skills. Recent concentration 011 the improvement of agriculture has 
resulted in a rapid growth in the output of food to a point that is now 
close to adequate for maintaining the population. 

Presently, the nation is in the midst of a boom, with industrial pro- 
duction expanding at the rate of 20 percent a year. The growth in 
GXP is running between 6 percent and 8 percent which, in the face of 
a drastically declining birth rate, is said to be bringing a great im- 
provement in general living standards. 

The Korean economic transition has depended heavily on U.S. eco- 
nomic aid, a program which is drawing to a close. The vestiges are 
calculated at about $40 million in the pipeline and, approximately $300 



2 Japan also has very limited trading contacts with North Korea, which, for the pres- 
ent have been suspended due to the inability of Pyongyang to make payment for past 

pure-hasps. 

3 One readily recognizable yardstick of this investment : all black and white Sony T/Vs 
which are distributed by Japan are now made in South Korea. 



29 



5 

million in agricultural products, under a PL 480 agreement. An in- 
vestment guarantee program continues to operate and is a significant 
factor in the inflow of private capital. 

Korean trade is still closely tied to the United States and Japan, 
with the latter, in particular, providing a funnel for the outflow of 
Korean manufactures. However, the Koreans are beginning to devel- 
op independent commercial contacts with the rest of the world and Ko- 
rean firms are said to have written in the neighborhood of $2 billion 
of contracts to undertake construction in the Middle Eastern oil coun- 
tries. Seoul is attracting an increasing inflow of businessmen from 
that region and from all other parts of the world, except Latin 
America and Africa. 

The Korean capital city which now contains about 7 million persons 
is the center of industrial and commercial activity. It is a dynamic 
modern city in the midst of a building boom. It should be noted that 
the building includes deep concrete tunnels everywhere which are de- 
signed to relieve heavy surface traffic but which could serve as shelters 
in the event of war. 

It is not possible to find in the present situation a persuasive reason 
to believe that war is imminent. Along the 38° parallel, except for 
occasional localized personnel clashes and a two-way loud-speaker 
propaganda war, all is quiet. The International Commission (Czecho- 
slovakia, Poland, Switzerland and Sweden), as it has been for more 
than two decades, is present in the Zone. North Koreans and U.S. and 
South Korean military personnel continue to maintain rigidly formal 
contact, with occasional quarrels across the conference table that stand 
astride the 38° parallel. While the southern approaches to the demili- 
tarized zone run through a kind of no-man's land, it is said that 40.000 
tourists and other visitors a year pass through them to the 38° parallel. 
Xorth Korea also has its flow of tourist buses carrying Koreans and 
other visitors from Communist countries to observe the dividing line. 

The Soviet Union and the People's Republic of China are believed 
to have exercised a restraining influence on Pyongyang in order to 
prevent a precipitous rekindling of the war. However, Kim Il-sung, 
the Northern ruler, asserts that there is no intention to seek unifica- 
tion of the country by military means. The two sides continue to meet 
periodically at a very low level of Red Cross contact to seek unifica- 
tion by other means but progress to date has been completely absent. 

In the South, the government stresses continuously the danger of 
invasion from the North and concentrates on the improvement of its 
military forces. The modernization program, except in regard to the 
Navy, is well-advanced. The U.S. aid-subsidy of the Korean military 
establishment is now largely provided under the military purchase 
program. The Koreans are assuming an increasingly larger share of 
the cost of their military establishment. 

Notwithstanding these developments, the presence of U.S. combat 
forces in the South is seen as the critical factor in preventing an inva- 
sion from the North. There is deployed in the South, a contingent of 
about 40,000 U.S. servicemen. Except for small economy-induced re- 
ductions, the number has not been lowered in many years. Even those 
who stress most heavily the role of these forces in preventing a renewal 
of conflict do not argue that the total cannot be reduced in a gradual 
way over a period of years or, even, eventually be withdrawn. Any sug- 



30 



6 

gost ion of rapid withdrawal, however, is a source of profound anxiety 
to South Korean officials, even more perhaps than to the Japanese. 
Some estimates are that the present structure in South Korea would 
have no more than a 50-50 chance of survival without the U.S. military' 
presence. However, the Administration has made clear that the United 
States has no intention of withdrawing precipitously and, similarly, 
the Congress has not taken any measures which would compel a pre- 
cipitous withdrawal. In short, the situation insofar as the U.S. forces 
are concerned is one of stability. 

It is a stability, however, which is underlain with uncertainties. In 
the first place, the economic progress which is probably a mainstay of 
public acquiescence in the present government rests on an extremely 
fragile base. It is dependent almost entirely on the import of raw ma- 
terials and the export of industrial surpluses which are produced 
competitively largely by the comparative advantage of a low wage 
scale and investment guarantees. Any tremors in either the economy of 
Japan or the United States tend to become earthquakes in South 
Korea. 

In the second place, although the present government is fully aware 
of the aversion which exists in segments of Congressional and 
other opinion in the United States regarding its authoritarianism, it 
appears to have no intention of modifying the present political struc- 
ture. Its view is that this structure is not only necessary for defense 
against the North but is essential to the kind of economic progress 
which is being fostered in the South. 

Finally, there is the question of U.S. military withdrawal. The 
question is often asked : how long will the commitment last ? Clearly, a 
precipitous pullout by the United States, even if it did not open the 
^door to military attack from the North would shake the government of 
;South Korea to its very foundations. The reactions of an embittered 
political opposition and from within the military establishment are 
not measurable. Moreover, it is entirely possible that the deep-seated 
sentiments for Korean unification would surface in both North and 
South. The potential for spreading instability would be very great. 
Notwithstanding outward appearances, then, the basis for the Japa- 
nese concern regarding the Korean Peninsula is very real. In short, 
Korea is a time-bomb which has yet to be defused. 

Looking at Asia in general, there is a strong mutuality of interests 
shared by Japan and the United States. Japan is a firm supporter of 
ASEAN, the Association of Southeast Asian Nations, as a new force 
for economic cooperation and progress in Southeast Asia. Japan is 
also interested in working toward broadening the regional concept of 
ASEAN to bring the nations of Indochina into the current member- 
ship : the Philippines, Thailand, Malaysia, Singapore, and Indonesia. 
Regional cooperation for peaceful purposes is a concept which appears 
to have broad support in Japan and, if pursued, should contribute to 
Asian stability and progress. "Poverty and peace," one Japanese of- 
ficial put it, "cannot co-exist." 

As to national security matters, in June the Japanese Defense 
Agency issued a Defense White Paper, the second since the end of 
EWorld' War II. The basic objectives of the paper were to stimulate 
discussion of Japan's defense posture and to strengthen public support 
for the Government's program to upgrade the quality of these forces 



31 



X 

(the text of the paper is printed in the Appendix) . The report is prem- 
ised on a continuation of the international status quo between the 
United States, the Soviet Union, and China and no change in J apan's 
ultimate dependence on the U.S. security guarantee. 

Basically, the report takes an optimistic view of the international 
situation for Japan and assumes that any U.S.-U.S.S.R. conflict will 
not spill over to affect Japan. It rejects a nuclear option, stating that : 

If Japan should take a nuclear option, even for a purely defensive purpose, 
her actual possession of nuclear arms will create serious suspicion and fear on 
the part of other nations. 

The international environment on which Japan's defense policy 
will be based is described as assuming : 

(a) that the U.S. and the Soviet Union will try to avoid an inter-continental 
nuclear war and an armed conflict which might lead to their full-scale involve- 
ment. 

(b) that the Soviet Union will continue to face many European problems — 
a NATO-Warsaw Pact confrontation and the control of East European nations, 
among other matters. 

(c) that Sino-Soviet relations, if improved partially, will most unlikely lead 
to an end of confrontation. 

(d) that in Sino-U.S. relations, a further adjustment will continue on a 
reciprocal basis, and 

(e) that the status quo, more or less, will be maintained in the Korean 
Peninsula where a minor incident would not escalate to a large-scale conflict. 

Japan's view of the U.S.- Japan security relationship is described 
this way : 

(a) The system is generally understood to play the role of preventing aggres- 
sion against Japan from actually taking place, and of limiting the scale of an 
invasion, should it ever be undertaken. 

(b) The system is also instrumental in providing the U.S. forces with facilities 
and areas for their use, which in turn make their presence tenable. 

An integral part of the basic framework of international relations in Asia, the 
system thus contributes to the stability of the world and the maintenance of 
peace. Finally, but not the least importantly, it is the indispensable base of 
the wider spectrum of friendly U.S. -Japanese relations. 

Clearly, reliance on the U.S. commitment remains strong on the 
part of the Japanese government, and close observers say that there is 
less controversy now over the U.S. security treaty than at any time 
since the relationship was formalized twenty-four years ago. There is 
now a more rational, less emotional, public dialogue over security 
issues than in the past. I found no indication that the fall of Indochina 
had resulted in any lessened confidence in the U.S. commitment, al- 
though there was some initial nervousness. 

The White Paper emphasizes that Japan's defense objective is "on 
qualitative improvement rather than on quantitative expansion in the 
planned buildup of our defense capability." Defense Minister Sakata 
described the basic concept, as one for a "small armed force, but a 
bigger load" for Japan. The Japanese view, in this connection, should 
be respected. It behooves us to be very cautious in taking any step that 
could be interpreted by Asians, or by the Japanese people, as pressing 
the Japanese government to make a quantitative increase in the size 
of its defense force or to change its defense posture in a significant 
way. 

This year Japan will spend .089 percent of its GXP and 6.17 percent 
of the government budget for defense, compared with current defense 



32 



8 

spending totaling 5.5 percent of GNP and 24.8 percent of the budget 
by the United States. Japan ranks tenth in the world in military 
spending but at the bottom in relation to per capita income. GNP, or 
as r portion of the overall budget. 

Agreement has been reached to establish a joint Defense Coopera- 
tion Subcommittee to operate under the U.S.-Japan Consultative Com- 
mit tee on Security, the basic focal point for discussion of security 
treaty matters. The Subcommittee will have the responsibility to dis- 
cuss guidelines for military cooperation between the two countries in 
the event of an emergency. Officials on both sides place much value on 
the new subcommittee, seeing it as a symbol of a new spirit of coop- 
eration on security matters. 

-4. U.S. base* and persomtel 

United States bases in Japan, particularly those on Okinawa, are 
still a source of tension although the situation is easing with continued 
reduction in the number of bases and the drawdown of military per- 
sonnel. 4 

Article VI of the U.S.-Japan Security Treaty provides: 

For the purpose of contributing to the security of Japan and the maintenance 
of international peace and security in the Far East, the United States of 
America is granted the use by its land, aid and naval, forces of facilities and 
areas in Japan. > . 

In 1952, according to the Japan Defense Agency, there were 2,824 
U.S. military facilities in Japan, of all sizes, covering 334,100 acres, 
and occupied by 260,000 U.S- servicemen. These facilities have now 
been reduced to 136 and take up 125,089 acres; they range in signifi- 
cance from the huge Kadena Air Base on Okinawa to a single antenna 
site taking less than an acre, Most are small facilities with few people 
attached. There are still 50,000 U.S. servicemen in Japan, along with 
43.220 dependents and 3,768 civilian Department of Defense em- 
ployees. Land for the bases is provided rent-free. The rent on privately 
owned land is paid to the landowner by the Japanese government. 
Thirty-eight of the facilities are used jointly by U.S. forces and the 
Japanese Self-Defense Forces. More than half of the base acreage 
and nearly two-thirds of the personnel are located on Okinawa. Other 
than those on Okinawa, measured by the number of personnel at- 
tached, there are only seven major U.S. bases : 

U.S. military 

T personnel attached 

1. Yokota Air Base — Headquarters, U.S. Forces Japan and of the 5th 

Air Force LJ ____ 4, 122 

2. Camp Zama— Headquarters of the U.S. Army in Japan 791 

3. Yokosuka — Headquarters, U.S. Naval Forces in Japan 1,876 

4. Iwakuni Air Station — Air Base for First Marine Air Wing 5, 102 

5. Atsugi Naval Air Facility— 7th Fleet Naval Air Facility 614 

6. Mi saw a Air Base — Air Force Base. 3,081 

7. Sasebo— Naval base L 168 

4 What has happened on the northern island of Hokkaido Is a microcosm of the kind of 
contraction in the U.S. presence in most parts of Japan over the last auarfer of a centurv. 
At the end of World War II, the military occupation introduced 13.000 U.S. troops into 
Hokkaido, mostly centered on the capital city of Sapporo. At least a division remained 
during the Korean War. In 1959. the airfield for Sapnoro reverted to Japan and U.S. 
forces were cut back to a communications unit. By 1970, only a guard unit of 200 men 
remained. It was not until June of 1975 that this unit was withdrawn. What is left of the 
U.S. military presence is a Cpast Guard "LORAN" unit on the Hokkaido coast. The offi- 
cial U.S. presence now consists of a consulate in Sapporo, with three Americans, a 
T'.S.T.S. center run by an American and a specialist from the Department of Agriculture, 
on a temporary basis. 



33 



9 

Japan makes a significant financial contribution to paying for the 
<*osts of the U.S. military presence. This year Japan will pay $373 
million toward the costs of retaining the bases: $105 million for land 
rental, $104 million in compensation to impacted communities, and 
S173 million for the costs of reducing the number of bases through 
consolidation. All new construction in connection with the consolida- 
tion of U.S. facilities is paid for by the Japanese government. 

1. Okinawa. — Although anti-U.S. military base pressures on the 
Japanese mainland seem to have eased, there is still strong public op- 
position to American bases on Okinawa. Twenty percent of the land 
area of the island of Okinawa is occupied by U.S. bases and they take 
up to 12% of the Ryukyu Islands chain. A joint decision was reached 
recently to return twelve additional U.S. facilities, including a firing 
range on Iejima Island which has been the source of much local con- 
troversy. After these reversions take place, the area occupied by the 
U.S. bases will be reduced from V2 percent to 9.8 percent of the total 
land area of the island chain. 

Okinawans have strong feelings about the bases, which are scattered 
throughout the island in a checkerboard fashion. Residents carry a 
bitter legacy of anti-military feeling as a residue from World War II, 
when 150,000 Okinawans were killed. There is also a widespread feel- 
ing that Okinawans are carrying a disproportionate burden of Japan's 
% defense effort, that they are being used in Tokyo. They are also con- 
cerned over the possibility of being sucked into an outside war regard- 
less of the fact that they do not feel threatened by any external power. 

Recently the opposition candidate for governor won in a close elec- 
tion with a plank that called for removal of all U.S. bases and per- 
sonnel, although the pro-Tokyo government candidate also favored 
substantial reductions. It is impossible to determine how significant a 
factor the differences in the views of the candidates on the bases was 
in the election, but officials in Tokyo with' whom I discussed the situa- 
tion were acutely aware of the sensitivity of the base issue to Okina- 
wans. It is an issue easily susceptible to political exploitation through- 
out Japan. 

Although the bases account for 15 percent or more of Okinawa's in- 
come, this fact does not appear to have softened the persistent public 
resentment against the U.S. military presence. The 32.000 remaining 
servicemen in their concentrated U.S. communities still stick out like 
a -ore thumb on the island, although incidents of overt personal hos- 
tility are becoming rarer. It is interesting to note that there are only 
about 5,000 members of the Japanese Self -Defense Force on Okinawa, 
using land which totals less than one percent of the area used by 
American forces. There is little joint use of facilities: the Japanese air 
units, for example, do not have a firing range and must return to the 
Japanese mainland for firing practice. 

Apart from Okinawa, a heavy U.S. military concentration exists in 
the Tokyo- Yokohama area, the most densely populated part of Japan 
and is being reduced only slowly. The Sanno Hotel which has been 
held by the U.S. Army since occupation days is an example. Located 
in the heart of Tokyo, the hotel is used primarily for U.S. military 
personnel on leave and, on occasion, by U.S. Government travelers on 
military business. Since the mid-1950's the Japanese government and 



34 



10 

the owners of the property have been trying to get the United States 
to release this building. Finally, late last year, after taking the 
Japanese government to court, the owner won a settlement calling for 
payment of compensation and for return of the property within five 
years. But the U.S. still insists on a replacement in the downtown 
Tokyo area before it will relinquish the Sanno, notwithstanding the 
fact that any valid military justification for retaining this particular 
facility ended long ago. . . . 

The reduction and consolidation of U.S. bases m Japan which is 
spurred by pressures of budget limitations, steeply-climbing prices in 
Japan, and Japanese cooperation, is generally headed in the right 
direction. It should continue, on the basis of close consultation at all 
times with Japanese officials. 

III. ECONOMIC RELATIONS 

Japanese and American economic interests are inextricably en- 
twined. America is Japan's largest market and Japan is our most 
important market, aside from Canada. Currently the United States 
absorbs some 24 percent of Japan's exports, down from a considerably 
higher proportion several years ago, marking the diversification of 
Japan's foreign markets. 

There have, of course, been problems with our trade in the past — - 
over steel, textiles and other items— but with time, restraint, and con- 
cessions on both sides these problems have been surmounted. Other 
bilateral trade difficulties are to be anticipated in the future. With 
goodwill, cooperation, and understanding of mutual needs, these prob- 
lems should also be manageable. There may well be a need for addi- 
tional mechanisms for day-to-day dialogue between the two govern- 
ments on economic issues, both to find solutions to problems before 
they become critical as well as to provide forums for discussion of 
matters of mutual interest. 

A matter of potential concern for the immediate future, is the re- 
appearance of a growing gap in bilateral trade balances. Japanese ex- 
ports to the United States for January-April 1976 exceeded imports 
from the United States by $1,628 billion, compared with a deficit of 
$735.5 million for the last four months of 1975. 

Japan's economic growth rate this year, in real terms, is estimated at 
6.2 percent which will result in a GNP of $515.6 billion, somewhat 
more than one-third of that of the United States. Inflation has been 
brought under reasonable control and is now running at an annual 
rate of 8.8 percent. Unemployment is 2 percent, although U.S. and 
Japanese figures are not comparable due to different employment 
practices. Environmental issues are of growing public concern in 
Japan and expenditures for environmental protection now absorb 
some 13 percent of all capital expenditures compared with about 5 
percent for comparable spending in the United States. 

As is the case with most other raw materials, Japan is heavily de- 
pendent for its energy requirements on foreign sources and it will con- 
tinue to be for the foreseeable future. Eighty-nine percent of its energy 
needs are derived from imports (seventy-seven percent from oil). 
Under a ten-year plan for energy development, its dependence on for- 
eign energy sources will be reduced by only seven percent. Japan's 



3,5 



11 

domestic petroleum production is negligible, although some drilling is 
underway at offshore sites. 

Other than the trade deficit, which to a great extent is a factor of 
the uneven recovery rates of our respective economies, there are only 
two major bilateral issues of current concern, fisheries and air routes. 
The Japanese people depend on fish for 60 pert-cur of their protein 
and are heavily dependent on ocean fishery resources. They are deeply 
concerned over the. potential impact of the recently enacted law to 
establish a 200 mile territorial limit for fishing (P.L. 94-265). I ex- 
plained to the officials who raised this matter that the Congress voted 
this interim measure out of self-defense following repeated failures 
by the United Nations Law of the Sea Conference to arrive at an in- 
ternational agreement: after many nations had unilaterally increased 
their territorial claims to 200 miles; and that imposition of the limit 
would be held in abeyance for an additional period to give the U.N. 
Conference more time to come up with a solution. Discussions between 
Japanese and U.S. officials over the implementation of the new law 
have begun and it is to be hoped that a satisfactory bilateral solution 
can be found, assuming that the U.N. Conference again fails to pro- 
duce an international accord. The air route issue involves a Japanese 
desire for new ports of entry into the United States and it is also likely 
to involve requests by U.S. airlines for the right to continue service 
to Okinawa. 

The Lockheed affair, or Lockheed "typhoon," as one official called 
it. is Japan's Watergate. It is a Japanese — not an American — prob- 
lem. Thus far, it appears that the affair has had no major adverse ef- 
fect on Japan-U.S. relations. However, it has had an impact on the 
conscience of the Japanese public and may eventually set in motion 
significant changes in Japan's political structure and alinement. In 
my judgment, the American political system has not onlv survived 
the Watergate affair, in the end, it may be strengthened by it. It is 
entirely possible that the Lockheed scandal could have the same effect 
in Japan. 

The Senate Committee on Foreign Relations has turned over to the 
Executive Branch all information in its possession relating to the af- 
fair for transmittal to the Japanese government. Japanese officials 
are aware that Congress had been fully cooperative with their govern- 
ment on the matter. 

Looking to the future, it is in the interest of Japan, the United 
States, and the world to establish international ground rules to control 
under-the-table business dealings and political manipulations like 
those involved in the Lockheed affair. In this era of multinational 
corporations and state trading, a single country cannot do much, acting 
alone, to prevent such practices. "Multinational firms," one Japanese 
official agreed, "cannot be checked through individual governments.'' 
This dry rot in the world's commerce is an international problem and 
solutions in a similar fashion can only be international. The United 
Nations may well be peculiarly suited to this purpose. 

IV. CONCLUDING OBSERVATIONS 

Although the Japan-LT.S. relationship began nearly a century and 
a quarter ago, the unique meshing of our two countries' interests began 



36 



12 

with the end of World War EE. Japan has now become the second 
most powerful industrial democracy in the world. And under the U.S. 
security umbrella, Japan has been free of fear of outside attack and of 
burdensome military spending. It has been able to devote its vast en- 
ergies to creating an economic machine of immense productivity. 

In 1960, riots and widespread public protests against the mutual 
security treaty with the United States caused the cancellation of Pres- 
ident Eisenhower's plans to visit Japan. President Ford's visit to 
Japan in 1974 and Emperor Hirohito's visit to the United States last 
October, historic occasions for both nations, epitomized the changes 
which have taken place in our relationship since that time. At no 
period in our post-war history have U.S. relations with Japan been 
better. 

But as the visit by Commodore Perry signaled the end of one era 
for Japan, an era of isolation from the outside world, we have entered 
a new era in our contemporary relationship. The end of the post-war- 
era was signaled by the 1972 Okinawa reversion agreement. We have 
now reached a new plateau, where trust in affairs of mutual concern 
is essential to both countries. We cannot afford either to preach to the 
Japanese, to patronize them, or to ignore their legitimate interests. 
The only basis for trust is to treat with one another on the basis of 
equality. 

The U.S.- Japan security treaty is more than a pledge to main- 
tain a stable and peaceful Pacific. It is a symbol of the need for day- 
to-day cooperation between Japan and the United States across a 
range of human activities. The partnership begun at the end of World 
War II should be strengthened by additional mechanisms for consul- 
tation and discussion, building on the precedent of the recently cre- 
ated Joint Defense Cooperation Subcommittee. 

Japan is the only major nation in the world which has rejected 
military power as the basis for the protection and advancement of its 
interests. Japan is in a unique position, therefore, to exercise leader- 
ship in dealing with the problems which will increasingly trouble the 
world in the years ahead. Environmental issues, shortages of energy 
and other resources, food and population problems, the world arms 
burden and nuclear dangers — all are matters with regard to which 
Japan is uniquely situated to play an international role of leadership. 
Japan's unique position in the world warrants a permanent seat on the 
United Nations Security Council and an amendment to the U.N. Char- 
ter to that end would be in order. 

There may be shifts in Japanese political currents in the period 
ahead as Japan goes through a period of reassessment. Jt is especially 
important that United States officials become better acquainted with 
and more closely attuned to the broader spectrum of Japanese opinion. 
A greater exchange of academicians, politicians, journalists, cultural 
leaders, and others would be in the longrange interests of both 
countries. 

Japanese and American policy interests in the Far East are well 
served by continuation of the present security treaty relationship. Jap- 
anese confidence in the United States commitment is a key factor for 
stability in the area. I found no evidence of a move to change Japan's 
military status in such a way as to cause her neighbors concern. Nor 
is there any reason that a further reduction in U.S. bases and forces 



37 



13 

should create uncertainty about the U.S. treaty commitment. Contin- 
uation of the present policy to consolidate and eliminate non-essential 
facilities is desirable, economical and will serve our common interests. 

U.S. -Japan relations are good but they could be better. The era of 
patron-client is over. A new relationship on the basis of equality and 
a mutuality of interests has begun. Professor Edwin Reischauer de- 
scribed the potential of that relationship as a pattern for the world's 
future in this way : 

If we and the Japanese can build a fully equal relationship of complete trust 
and cooperation as the two leading- members of the group of industrialized 
democracies, this may be a hopeful sign that in time other such relationships can 
be built across the chasms of racial and cultural difference, as we move toward, 
creating a truly viable "one world." 

This is a worthy goal for both countries. 

V. RECOMMENDATIONS 

The recommendations which are contained in this report may be 
summarized as follows : 

1. No more "shocks". Wherever feasible, joint mechanisms should be 
established for periodic consultations on problems of common concern. 
Our unique relationship warrants unique approaches to insure a con- 
tinuing dialogue, at all levels, on matters of mutual interest. 

2. Japan should obtain a permanent seat on the U.N. Security 
Council. 

3. The reduction and consolidation of U.S. military facilities and 
personnel should continue in close consultation with the Japanese 
government. 

4. There should be broadened contacts, official and unofficial, be- 
tween Japan and the United States. 

5. The United Nations should undertake to develop a treaty en- 
compassing a code of conduct for international commercial dealings 
which would outlaw practices such as those involved in the Lockheed 
affair. 

6. There should be a gradual withdrawal of U.S. ground forces 
from South Korea as that nation's military strength improves. 



Appendix 



1. Treaty of Mutual Cooperation and Security Between the United States 

of America and Japan 

Signed at Washington January 19, I960: Ratification adivsed by the Senate of 
the United States of America June 22. 1960; Ratified by the President of the 
United States of America June 22, 1960: Ratified by Japan June 21, 1960; Rati- 
fications exchanged at Tokyo June 23. 1960 ; Proclaimed by the President of the 
United States of America June 27, 1960; Entered into force June 23, 1960. With 
Agreed Minute and Exchanges of Notes. 

The United Srates of America and Japan, 

Desiring to strengthen the bonds of peace and friendship traditionally exist- 
ing between them, and to uphold the principles of democracy, indvidual liberty, 
and the rule of law. 

Desiring further to encourage closer economic cooperation between them and 
to promote conditions of economic stability and well-being in their countries. 

Reaffrming their faith in the purposes and principles of the Charter of The 
United Nations, and their desire to live in peace with all peoples and all govern- 
ments. 

Recognizing that they have the inherent right of individual or collective self- 
defense as affrmed in the Charter of the United Nations. 

Considering that they have a common concern in the maintenance of inter- 
national peace and security in the Far East, 

Having resolved to conclude a treaty of mutual cooperation and security. 

Therefore agree as follows : 

article i 

The Parties undertake, as set forth in the Charter of the United Nations, to 
settle any international disputes in which they may be involved by peaceful 
means in such a manner that international peace and security and justice are not 
endangered and to refrain in their international relations from the threat or use 
of force against the territorial integrity or political independence of any state, or 
in any other manner inconsistent with the purposes of the United Nations. 

The Parties will endeavor in concert with other peaee-loving countries to 
strengthen the United Nations so that its mission of maintaining international 
peace and security may be discharged more effectively. 

article ii 

The Parties will contribute toward the further development of peaceful and 
friendly international relations by strengthening their free institutions, by bring- 
ing about a better understanding of the pirnciples upon which these institutions 
are founded, and by promoting conditions of stability and well-being. They will 
seek to eliminate conflict in their international economic policies and will en- 
courage economic collaboration between them. 

article III 

The Parties, individually and in cooperation with each other, by means of 
continuous and effective self-help and mutual aid will maintain and develop, 
subject to their constitutional provisions, their capacities to resist armed attack. 

ARTICLE IV 

The Parties will consult together from time to time regarding the implementa- 
tion of this Treaty, and. at the request of either Party, whenever the security of 
Japan or international peace and security in the Ear East is threatened. 

(15) 



(39) 



40 



16 



ARTICLE V 

Each Party recognizes that an armed attack against either Party in the terri- 
tories under the administration of Japan would be dangerous to its own peace 
-and safety and declares that it would act to meet the common danger in accord- 
ance with its constitutional provisions and processes. 

Any such armed attack and all measures taken as a result thereof shall be 
immediately reported to the Security Council of the United Nations in accord- 
ance with the provisions of Article 51 of the Charter. Such measures shall be 
terminated when the Security Council has taken the measures necessary to 
restore and maintain international peace and security. 

ARTICLE VI 

For the purpose of contributing to the security of Japan and the maintenance 
of international peace and security in the Far East, the United States of America 
is granted the use by its land, air and naval forces of facilities and areas in 
Japan. 

The use of these facilities and areas as well as the status of United States 
armed forces in Japan shall be governed by a separate agreement, replacing the 
Administrative Agreement under Article III of the Security Treaty between the 
United States of America and Japan, signed at Tokyo on February 28, 1952, as 
amended, and by such other arrangements as may be agreed upon. 

ARTICLE VII 

This Treaty does not affect and shall not be interpreted as affecting in any 
way the rights and obligations of the Parties under the Charter of the United 
Nations or the responsibility of the United Nations for the maintenance of inter- 
national peace and security. 

article vni 

This Treaty shall be ratified by the United States of America and Japan in 
accordance with their respective constitutional processes and will enter into 
force on the date on which the instruments of ratification thereof have been ex- 
changed by them in Tokyo. 

article IX 

The Security Treaty between the United States of America and Japan signed 
at the city of San Francisco on September 8, 1951 shall expire upon the entering 
into force of this Treaty. 

article x 

This Treaty shall remain in force until in the opinion of the Governments of 
the United States of America and Japan there shall have come into force such 
United Nations arrangements as will satisfactorily provide for the maintenance 
of international peace and security in the Japan area. 

However, after the Treaty has been in force for ten years, either Party may 
give notice to the other Party of its intention to terminate the Treaty, in which 
case the Treaty shall terminate one year after such notice has been given. 



agreed minute to the treaty of mutual cooperation and security between 
the united states of america and japan 

J a i>a n ese Plcn ipo t entiary 

While the question of the status of the islands administered by the United 
States under Article 3 of the Treaty of Peace with Japan has not been made a 
subject of discussion in the course of treaty negotiations. I would like to em- 
phasize the strong concern of the Government and people of Japan for the safety 
of the people of these islands since Japan possesses residual sovereignty over 
these islands. If an armed attack occurs or is threatened against these islands, 
the two countries will of course consult together closely under Article IV of 
the Treaty of Mutual Cooperation and Security. In the event of an armed attack, 
it is the intention of the Government of Japan to explore with the United States 
measures which it might be able to take for the welfare of the islanders. 



41 



17 

United States Plenipotentiary 

In the event of an armed attack against these islands, the United States Gov- 
ernment will consult at once with the Government of Japan and intends to take 
the necessary measures for the defense of these islands, and to do its utmost to 
secure the welfare of the islanders. 



Exchanges of Notes Between the United States and Japan Dated 
January 19, 1960 

His Excellency Christian A. Herter, 

Secretary of State of the United States of Amerida. 

Excellency : I have the honour to refer to the Treaty of Mutual Cooperation 
and Security between Japan and the United States of America signed today, and 
to inform Your Excellency that the following is the understanding of the Govern- 
ment of Japan concerning the implementation of Article VI thereof : 

"Major changes in the deployment into Japan of United States armed forces, 
major changes in their equipment, and the use of facilities and areas in Japan 
as bases for military combat operations to be undertaken from Japan other than 
those conducted under Article V of the said Treaty, shall be the subjects of prior 
consultation with the Government of Japan." 

I should be appreciative if Your Excellency would confirm on behalf of your 
Government that this is also the understanding of the Government of the United 
States of America. 

I avail myself of this opportunity to renew to Your Excellency the assurance 
of my highest consideration. 

Nobusuke Kishi. 



His Excellency Nobusuke Kishi, 
Prime Minister of Japan. 

Excellency : I have the honor to acknowledge the receipt of Your Excellency's 
Note of today's date, which reads as follows : 

"I have the honour to refer to the Treaty of Mutual Cooperation and Security 
between Japan and the United States of America signed today, and to inform 
Your Excellency that the following is the understanding of the Government of 
Japan concerning the implementation of Article VI thereof : 

"Major changes in the deployment into Japan of United States armed forces, 
major changes in their equipment, and the use of facilities and areas in Japan as 
bases for military combat operations to be undertaken from Japan other than 
those conducted under Article V of the said Treaty, shall be the subjects of prior 
consultation with the Government of Japan. 

"I should be appreciative if Your Excellency would confirm on behalf of your 
Government that this is also the understanding of the Government of the United 
States of America. 

"I avail myself of this opportunity to renew to Your Excellency the assurance 
of my highest consideration." 

I have the honor to confirm on behalf of my Government that the foregoing 
is also the understanding of the Government of the United States of America. 
Accept, Excellency, the renewed assurances of my highest consideration. 

Christian A. Herter, 
Secretary of State of the 
United States of America. 



His Excellency Nobusuke Kishi, 
Prime Minister of Japan. 

Excellency : I have the honor to refer to the Security Treaty between the 
United States of America and Japan signed at the city of San Francisco on 
September 8. 1951. the exchange of notes effected on the same date between Mr, 
Shigeru Yoshida, Prime Minister of Japan, and Mr. Dean Acheson, Secretary 
of State of the United States of America, and the Agreement Regarding the 
Status of the United Nations Forces in Japan signed at Tokyo on February 19, 
1954, as well as the Treaty of Mutual Cooperation and Security between the 



42 



18 

United States of America and Japan signed today. It is the understanding of my 
Government that : 

1. The above-mentioned exchange of notes will continue to be in force so long 
as the Agreement Regarding the Status of the United Nations Forces in Japan 
remains in force. 

2. The expression "those facilities and areas the use of which is provided to 
the United States of America under the Security Treaty between Japan and 
the United States of America" in Article V, paragraph 2 of the above-mentioned 
Agreement is understood to mean the facilities and areas the use of which is 
granted to the United States of America under the Treaty of Mutual Coopera- 
tion and Security. 

3. The use of the facilities and areas by the United States armed forces under 
the Unified Command of the United Nations established pursuant to the Security 
Council Resolution of July 7, 1950, and their status in Japan are governed by 
arrangements made pursuant to the Treaty of Mutual Cooperation nad Security, 

I should be grateful if Your Excellency could confirm on behalf of your 
Government that the understanding of my Government stated in the foregoing 
numbered paragraphs is also the understanding of your Government and that 
this understanding shall enter into operation on the date of the entry force 
of the Treaty of Mutual Cooperation and Security signed at Washington on 
January 19, I960. 

Accept, Excellency, the renewed assurances of my highest consideration. 

Christian A. Herter, 
Secretary of State of the 
United States of America. 



His Excellency Christian A. Herter, 

Secretary of State, of the United States of America. 

Excellency : I have the honour to acknowledge the receipt of Your Excel- 
lency's Note of today's date, which reads as follows : 

"I have the honor to refer to the Security Treaty between the United 
States of America and Japan signed at the city of San Francisco on Sep- 
tember 8, 1931, the exchange of notes effected on the same date between Mr. 
Shigeru Yoshida, Prime Minister of Japan, and Mr. Dean Acheson, Secretary 
of State of the United States of America and the Agreement Regarding the 
Status of the United Nations Forces in Japan signed at Tokyo on February 
19, 1954, as well as the Treaty of Mutual Cooperation and Security between 
the United States of America and Japan signed today. It is the understand- 
ing of my Government that : 

1. The above-mentioned exchange of notes will continue to be in force 
so long as the Agreement Regarding the Status of the United Nations Forces 
in Japan remains in force. 

2. The expression 'those facilities and areas the use of which is provided 
to the United States of America under the Security Treaty between Japan 
and the United States of America' in Article V, paragraph 2 of the above- 
mentioned Agreement is understood to mean the facilities and the areos the 
use of which is granted to the United States of America under the Treaty 
of Mutual Cooperation and Security. 

3. The use of the facilities and areas by the United States armed forces 
under the Unified Command of the United Nations established pursuant to 
the Security Council Resolution of July 7, 1950, and their status in Japan 
are governed by arrangements made pursuant to the Treaty of Mutual Co- 
operation and Security. 

"I should be grateful if Your Excellency could confirm on behalf of your 
Government that the understanding of my Government stated in the fore- 
going numbered paragraphs is also the understanding of your Government 
and that this understanding shall enter into operation on the date of the 
entry into force of the Treaty of Mutual Cooperation and Security signed 
at Washington on January 19, 1900." 
I have the honour to confirm on behalf of my Government that the foregoing 
is also the understanding of the Government of Japan. 

I avail myself of this opportunity to renew to Y T our Excellency the assurance 
of my highest consideration. 

Nobusuke Kisht. 



43 



19 

His Excellency Christian A. Herter, 

Secretary of State, of the United States of America. 

Dear Secretary Herter : I wish to refer to the Treaty of Mutual Cooperation 
and Security between Japan and the United States of America signed today. 
Under Article IV of the Treaty, the two Governments will consult together from 
time to time regarding the implementation of the Treaty, and, at the request of 
either Government, whenever the security of Japan or international peace and 
security in the Far East is threatened. The exchange of notes under Article VI 
of the Treaty specifies certain matters as the subjects of prior consultation with 
the Government of Japan. 

Such consultations will be carried on between the two Governments through 
appropriate channels. At the same time, however, I feel that the establishment 
of a special committee which could as appropriate be used for these consulta- 
tions between the Governments would prove very useful. This committee, which 
would meet whenever requested by either side, could also consider any matters 
underlying and related to security affairs which would serve to promote under- 
standing between the two Governments and contribute to the strengthening of 
cooperative relations between the two countries in the field of security. 

Under this proposal the present "Japanese-American Committee on Security" 
established by the Governments of the United States and Japan on August 6, 
1957, would be replaced by this new committee which might be called "The 
Security Consultative Committee". I would also recommend that the member- 
ship of this new committee be the same as the membership of the "Japanese- 
American Committee on Security", namely on the Japanese side, the Minister 
for foreign Affairs, who will preside on the Japanese side, and the Director 
General of the Defense Agency, and on the United States side, the United States 
Ambassador to Japan, who will serve as Chairman on the Untied States side, 
and the Commander-in-Chief, Pacific, who will be the Ambassador's principal 
advisor on military and defense matters. The Commander, United States Forces, 
Japan, will serve as alternate for the Commander-in-Chief, Pacific. 

I would appreciate very much your views on this matter. 
Most sincerely, 

Nobusuke Kishi. 

His Excellency 
Nobusuke Kishi, 
Prime Minister of Japan. 
Dear Mr. Prime Minister: 

The receipt is acknowledged of your Note of today's date suggesting the estab- 
lishment of "The Security Consultative Committee". I fully agree to your pro- 
posal and share your view that such a committee can contribute to strengthen- 
ing the cooperative relations between the two countries in the field of security. 
I also agree to your proposal regarding the membership of this committee. 
Most sincerely, 

Christian A. Herter. 



2. Agreement Under Article VI op the Treaty of Mutual Cooperation and 
Security Between the United States of America and Japan, Regarding 
Facilities and Areas and the Status of United States Armed Forces in 
Japan 

The United States of America and Japan, pursuant to Article VI of the Treaty 
of Mutual Cooperation and Security between the United States of America and 
Japan signed at Washington on January 19, 1960, have entered into this Agree- 
ment in terms as set forth below : 

ARTICLE I 

In this Agreement the expression — 

(a) "members of the United States armed forces" means the personnel on 
active duty belonging to the land, sea or air armed services of the United States 
of America when in the territory of Japan. 

(b) "civilian component" means the civilian persons of United States nation- 
ality who are in the employ of, serving with, or accompanying the United States 
armed forces in Japan, but excludes persons who are ordinarily resident in 
Japan or who are mentioned in paragraph 1 of Article XIV. For the purposes of 
this Agreement only, dual nationals, United States and Japanese, who are brought 
to Japan by the United States shall be considered as United States nationals. 

(c) "dependents" means 

( 1 ) Spouse, and children under 21 ; 

(2) Parents, and children over 21, if dependent for over half their support 
upon a member of the United States armed forces or civilian component. 

ARTICLE II 

1 (a) The United States is granted, under Article VI of the Treaty of Mutual 
Cooperation and Security, the use of facilities and areas in Japan. Agreements 
as to specific facilities and areas shall be concluded by the two Governments 
through the Joint Committee provided for in Article XXV of this Agreement. 
"Facilities and areas" include existing furnishings, equipment and fixtures neces- 
sary to the operation of such facilities and areas. 

(b) The facilities and areas of which the United States has the use at the time 
of expiration of the Administrative Agreement under Article III of the Security 
Treaty between the United States of America and Japan, shall be considered as 
facilities and areas agreed upon between the two Governments in accordance 
with subparagraph (a) above. 

2. At the request of either Government, the Governments of the United States 
and Japan shall review such arrangements and may agree that such facilities 
and areas shall be returned to Japan or that additional facilities and areas may 
be provided. 

3. The facilities and areas used by the United States armed forces shall be re- 
turned to Japan whenever they are no longer needed for purposes of this Agree- 
ment, and the United States agrees to keep the needs for facilities and areas 
under continual observation with a view toward such return. 

4. (a) When facilities and areas are temporarily not being used by the United 
States armed forces, the Government of Japan may make, or permit Japanese 
nationals to make, interim use of such facilities and areas provided that it is 
agreed between the two Governments through the Joint Committee that such 
use would not be harmful to the purposes for which the facilities and areas are 
normally used by the United States armed forces. 

(b) With respect to facilities and areas which are to be used by United States 
armed forces for limited periods of time, the Joint Committee shall specify in 
the agreements covering such facilities and areas the extent to which the pro- 
visions of this Agreement shall apply. 

(21) 



(45) 



46 



22 



ABTICLE III 

1. Within the facilities and areas, the United States may take all the measures 
necessary for their establishment, operation, safeguarding and control. In order 
to provide access for the United States armed forces to the facilities and areas 
for their support, safeguarding and control, the Government of Japan shall, at; 
the request of the I'nited States armed forces and upon consultation between 
the two Governments through the Joint Committee, take necessary measures 
within the scope Of applicable laws and regulations over land, territorial waters 
and airspace adjacent to. or in the vicinities of the facilities and areas. The 
I'nited States may also take necessary measures for such purposes upon con- 
sultation between the two Governments through the Joint Committee. 

2. The I'nited States agrees not to take the measures referred to in paragraph 
1 in such a manner as to interfere unnecessarily with navigation, aviation, com- 
munication, or land travel to or from or within the territories of Japan. All 
questions relating to frequencies, power and like matters used by apparatus em- 
ployed by the I'nited States designed to emit electric radiation shall be settled 
by arrangement between the appropriate authorities of the two Governments. 
The Government of Japan shall, within the scope of applicable laws and regula- 
tions, take all reasonable measures to avoid or eliminate interference with tele- 
communications electronics required by the I'nited States armed forces. 

3. Operations in the facilities and areas in use by the I'nited States armed 
forces shall be carried on with due regard for the public safety. 

ARTICLE IV 

1. The United States is not obliged, when it returns facilities and areas to 
Japan on the expiration of this Agreement or at an earlier date, to restore 
the facilities and areas to the condition in which they were at the time they 
became available to the United States armed forces, or to compensate Japan 
in lieu of such restoration. 

2. Japan is not obliged to make any compensation to the United States for 
any improvements made in the facilities and areas or for the buildings or 
structures left thereon on the expiration of this Agreement or the earlier return 
of the facilities and areas. 

3. The foregoing provisions shall not apply to any construction which the 
Government of the United Stares may undertake under special arrangements 
wit h the Government of Japan. 

article v 

1. United States and foreign vessels and aircraft operated by, for. or under 
the control of the I'nited States for official purposes shall be accorded access- 
to any port or airport of Japan free from toll or landing charges. When cargo 
or passengers not accorded the exemptions of this Agreement are carried on 
such vessels and aircraft, notification shall be given to the appropriate Japa- 
nese' authorities, and their entry into and departure from Japan shall be ac- 
cording to the laws and regulations of Japan. 

2. The vessels and aircraft mentioned in paragraph 1. United States Govern- 
ment-owned vehicles including armor, and members of the United States armed 
forces, the civilian component, and their dependents shall be accorded access 
to and movement between facilities and areas in use by the United States armed 
forces and between such facilities and areas and the ports or airports of Japan. 
Such access to and movement between facilities and areas by United States 
military vehicles shall be free from toll and other charges. 

:>>. When the vessels mentioned in paragraph 1 enter Japanese ports, appro- 
priate notification shall, under normal conditions, be made to the proper 
Japanese authorities. Such vessels shall have freedom from compulsory pilotage, 
but if a pilot is taken pilotage shall be paid for at appropriate rates. 

ARTICLE VI 

1. All civil and military air traffic control and communications systems 
shall be developed in close coordination and shall be integrated to the extent 
necessary for fulfillment of collective security interests. Procedures, and any 
subsequent changes thereto, necessary to effect this coordination and integration 



47 



23 

will be established by arrangement between the appropriate authorities of the 
two Governments. 

2. Lights and other aids to navigation of vessels and aircraft placed or es- 
tablished in the facilities and areas in use by United States armed forces and 
in territorial waters adjacent thereto or in the vicinity thereof shall conform 
to the system in use in Japan. The United States and Japanese authorities 
which have established such navigation aids shall notify each other of their 
positions and characteristics and shall give advance notification before making 
any changes in them or establishing additional navigation aids. 

ARTICLE VII 

The United States armed forces shall have the use of all public utilities and 
services belonging to, or controlled or regulated by the Government of Japan, 
and shall enjoy priorities in such use, under conditions no less favorable than 
those that may be applicable from time to time to the ministries and agencies 
of the Government of Japan. 

ARTICLE VIII 

The Government of Japan undertakes to furnish the United States armed 
forces with the following meteorological services in accordance with arrange- 
ments between the appropriate authorities of the two Governments : 

(a) Meteorological observations from land and ocean areas including observa- 
tions from weather ships. 

(b) Climatological information including periodic summaries and the histori- 
cal data of the Meteorological Agency. 

(c) Telecommunications service to disseminate meteorological information re- 
quired for the safe and regular operation of aircraft. 

(d) Seismographic data including forecasts of the estimated size of tidal 
waves resulting from earthquakes and areas that might be affected thereby. 

ARTICLE IX 

1. The United States may bring into Japan persons who are members of the 
United States armed forces, the civilian component, and their dependents, sub- 
ject to the provisions of this Article. 

2. Members of the United States armed forces shall be exempt from Japanese 
passport and visa laws and regulations. Members of the United States armed 
forces, the civilian component, and their dependents shall be exempt from Jap- 
anese laws and regulations on the registration .and control of aliens, but shall 
not be considered as acquiring any right to permanent residence or domicile in 
the territories of Japan. 

3. Upon entry into or departure from Japan members of the United States 
armed forces shall be in possession of the following documents : 

(a) personal identity card showing name, date of birth, rank and number, 
service, and photograph ; and 

(b) individual or collective travel order certifying to the status of the indi- 
vidual or group as a member or members of the United States armed forces and 
to the travel ordered. 

For purposes of their identification while in Japan, members of the United 
States armed forces shall be in possession of the foregoing personal identity card 
which must be presented on request to the appropriated Japanese authorities. 

4. Members of the civilian component, their dependents, and the dependents 
of members of the United States armed forces shall be in possession of appro- 
priate documentation issued by the United States authorities so that their status: 
may be verified by Japanese authorities upon their entry into or departure from 
Japan, or while in Japan. 

5. If the status of any person brought into Japan under paragraph 1 of this; 
Article is altered so that he would no longer be entitled to such admission, the 
United States authorities shall notify the Japanese authorities and shall, if such 
person be required by the Japanese authorities to leave Japan, assure that trans- 
portation from Japan will be provided within a reasonable time at no cost to the 
Government of Japan. 

6. If the Government of Japan has requested the removal from its territory 
of a . member of the United States armed forces or civilian component or has 
made an expulsion order against an ex-member of the United States armed 



48 



24 

forces or the civilian comi>onent or against a dependent of a member or ex- 
member, the authorities of the United States shall be responsible for receiving 
the person concerned within its own territory or otherwise disposing of him 
outside* .Japan. This paragraph shall apply only to persons who are not. nationals 
of Japan and have entered Japan as members of the United States armed forces 
or civilian component or for the purpose of becoming such members, and to the 
•dependents of such persons. 

ARTICLE X 

1. Japan shall accept as valid, without a driving test or fee, the driving permit 
or license or military driving permit issued by the United States to a member 
of the United States armed forces, the civilian component, and their dependents. 

2. < Official vehicles of the United States armed forces and the civilian com- 
ponent shall carry distinctive numbered plates or individual markings which 
will readily identify them. 

3. Privately owned vehicles of members of the United States armed forces, 
the civilian component, and their dependents shall carry Japanese number plates 
to be acquired under the same conditions as those applicable to Japanese 
nationals. 

ARTICLE XI 

1. Save as provided in this Agreement, members of the United States armed 
forces, the civilian component, and their dependents shall be subject to the laws 
and regulations administered by the customs authorities of Japan. 

2. All materials, supplies and equipment imported by the United States armed 
forces, the authorized procurement agencies of the United States armed forces, 
or by the organizations provided for in Article XV, for the official use of the 
United States armed forces or for the use of the members of the United States 
armed forces, the civilian component, and their dependents, and materials, sup- 
plies and equipment which are to be used exclusively by the United States armed 
forces or are ultimately to be incorporated into articles or facilities used by 
such forces, shall be permitted entry into Japan; such entry shall be free from 
customs duties and other .such charges. Appropriate certification shall be made 
that such materials, supplies and equipment are being imported by the United 
States armed forces, the authorized procurement agencies of the United States 
armed forces, or by the organizations provided for in Article XV, or, in the 
case of materials, supplies and equipment to be used exclusively by the United 
States armed forces or ultimately to be incorporated into articles or facilities 
used by such forces, that delivery thereof is to be taken by the United States 
armed forces for the purposes specified above. 

3. Property consigned to and for the personal use of members of the United 
States armed forces, the civilian component, and their dependents, shall be 
subject to customs duties and other such charges, except that no duties or 
charges shall be paid with respect to : 

(a) Furniture and household goods for their private use imported by the 
members of the United States armed forces or civilian component when they first 
arrive to serve in Japan or by their dependents when they first arrive for 
reunion with members of such forces or civilian component, and personal effects 
for private use brought by the said persons upon entrance. 

(b) Vehicles and parts imported by members of the United States armed 
forces or civilian component for the private use of themselves or their dependents. 

(c) Reasonable quantities of clothing and household goods of a type which 
would ordinarily be purchased in the United States for everyday use for the 
private use of members of the United States armed forces, civilian component, 
and their dependents, wmich are mailed into Japan through United States mili- 
tary post offices. 

4. The exemptions granted in paragraphs 2 and 3 shall apply only to cases of 
importation of goods and shall not be interpreted as refunding customs duties 
and domestic excises collected by the customs authorities at the time of entry 
In cases of purchases of goods on which such duties and excises have already 
been collected. 

5. Customs examination shall not be made in the following cases: 

(a) Units of the United States armed forces under orders entering or leaving 
Japan : 

(b) Official documents under official seal and official mail in United States 
military postal channels ; 



49 



25 

(c) Military cargo shipped on a United States Government bill of lading. 

6. Except as such disposal may be authorized by the United States and Japa- 
nese authorities in accordance with mutually agreed conditions, goods imported 
into Japan free of duty shall not be disposed of in Japan to persons not entitled 
to import such goods free of duty. 

7. Goods imported into Japan free from customs duties and other such charges 
pursuant to paragraphs 2 and 3, may be re-exported free from customs duties 
and other such charges. 

8. The United States armed forces, in cooperation with Japanese authorities, 
shall take such steps as are necessary to prevent abuse of privileges granted to 
the United States armed forces, members of such forces, the civilian component, 
and their dependents in accordance with this Article. 

9. (a) In order to prevent offenses against laws and regulations administered 
by the customs authorities of the Government of Japan, the Japanese authori- 
ties and the United States armed forces shall assist each other in the conduct 
of inquiries and the collection of evidence. 

(b) The United States armed forces shall render all assistance within their 
power to ensure that articles liable to seizure by, or on behalf of, the customs 
authorities of the Government of Japan are handed to those authorities. 

(c) The United States armed forces shall render all assistance within their 
power to ensure the payment of duties, taxes, and penalties payable by members 
of such forces or of the civilian component, or their dependents. 

(d) Vehicles and articles belonging to the United States armed forces seized 
by the customs authorities of the Government of Japan in connection with an 
offense against its customs or fiscal laws or regulations shall be handed over 
to the appropriate authorities of the force concerned. 

ARTICLE XII 

1. The United States may contract for any supplies or construction work to be 
furnished or undertaken in Japan for purposes of, or authorized by, this Agree- 
ment, without restriction as to choice of supplier or person who does the con- 
struction work. Such supplies or construction work may, upon agreement between 
the appropriate authorities of the two Governments, also be procured through 
the Government of Japan. 

2. Materials, supplies, equipment and services which are required from local 
sources for the maintenance of the United States armed forces and the procure- 
ment of which may have an adverse effect on the economy of Japan shall be 
procured in coordination with, and, when desirable, through or with the assist- 
ance of, the competent authorities of Japan. 

3. Materials, supplies, equipment and services procured for official purposes 
in Japan by the United States armed forces, or by authorized procurement 
agencies of the United States armed forces upon appropriate certification shall 
be exempt from the following Japanese taxes: (a) Commodity tax; (b) Travel- 
ling tax ; (c) Gasoline tax ; (d) Electricity and gas tax. 

Materials, supplies, equipment and services procured for ultimate use by the 
United States armed forces shall be exempt from commodity and gasoline taxes 
upon appropriate certification by the United States armed forces. With respect 
to any present or future Japanese taxes not specifically referred to in this Article 
which might be found to constitute a significant and readily identifiable part of 
the gross purchase price of materials, supplies, equipment and services procured 
by the United States armed forces, or for ultimate use by such forces, the two 
Governments will agree upon a procedure for granting such exemption or relief 
therefrom as is consistent with the purposes of this Article. 

4. Local labor requirements of United States armed forces and of the organiza- 
tions provided for in Article XV shall be satisfied with the assistance of the 
Japanese authorities. 

5. The obligations for the withholding and payment of income tax, local in- 
habitant tax and social security contributions, and, except as may otherwise 
be mutually agreed, the conditions of employment and work, such as those re- 
lating to wages and supplementary payments, the conditions for the protection 
of workers, and the rights of workers concerning labor relations shall be those 
laid down by the legislation of Japan. 

6. Should the United States armed forces or as appropriate an organization 
provided for in Article XV dismiss a worker and a decision of a court or a Labor 



50 



26 

Relations Commission of Japan to the effect that the contract of employment has 
not terminated become final, the following procedure shall apply : 

(a ) The United stales armed forces or the said organization shall be informed 
by the Government of Japan of the decision of the court or Commission ; 

(I)) Should the United States armed forces or the said organization not desire 
to return the worker to duty, they shall so notify the Government of Japan within 
seven days after being informed by the latter of the decision of the court or 
Commission, and may temporarily withhold the worker from duty ; 

(c) Upon such notification, the Government of Japan and the United States 
armed forces or the said organization shall consult together without delay with 
a view to finding a practical solution of the case; 

(d) Should such a solution not be reached within a period of thirty days from 
the date of commencement of the consultations under (c) above, the worker will 
not be entitled to return to duty. In such ease, the Government of the United 
States shall pay to the Government of Japan an amount equal to the cost of em- 
ployment of the worker for a period of time to be agreed between the two Gov- 
ernments. 

7. Members of the civilian component shall not be subject to Japanese laws or 
regulations with respect to terms and conditions of employment. 

8. Neither members of the United States armed forces, civilian component, nor 
their dependents, shall be reason of this Article enjoy any exemption from taxes 
or similar charges relating to personal purchases of goods and services in Japan 
chargeable under Japanese legislation. 

9. Except as such disposal may be authorized by the United States and Japa- 
nese authorities in accordance with mutually agreed conditions, goods purchased 
in Japan exempt from the taxes referred to in paragraph 3, shall not be disposed 
of in Japan to persons not entitled to purchase such goods exempt from such tax. 

ARTICLE XIII 

1. The United States armed forces shall not be subject to taxes or similar 
charges on property held, used or transferred by such forces in Japan. 

2. Members of the United States armed forces, the civilian component, and 
their dependents shall not be liable to pay any Japanese taxes to the Govern- 
ment of Japan or to any other taxing agency in Japan on income received as a 
result of their service with or employment by the United States armed forces, or 
by i he organizations provided for in Article XV. The provisions of this Article do 
not exempt such persons from payment of Japanese taxes on income derived from 
Japanese sources, nor do they exempt United States citizens who for United 
States income tax purposes claim Japanese residence from payment of Japanese 
taxes on income. Periods during which such persons are in Japan solely by 
reason of being members of the United States armed forces, the civilian compo- 
nent, or their dependents shall not be considered as periods of residence or domi- 
cile in Japan for the purpose of Japanese taxation. 

3. Members of the United States armed forces, the civilian component, and 
their dependents shall be exempt from taxation in Japan on the holding, use, 
transfer inter se, or transfer by death of movable property, tangible or intangi- 
ble, the presence of which in Japan is due solely to the temporary presence of 
these persons in Japan, provided that such exemption shall not apply to prop- 
erty held for the purpose of investment or the conduct of business in Japan 
or to any intangible property registered in Japan There is no obligation under 
this Article to grant exemption from taxes payable in respect of the use of roads 
by private vehicles. 

ARTICLE XIV 

1. Fersons, including corporations organized under the laws of the United 
States, and their employees who are ordinarily resident in the United States 
and whose presence in Japan is solely for the purpose of executing contracts 
with the United States for the benefit of the United States armed forces, and 
who are designated by the Government of the United States in accordance with 
the provisions of paragraph 2 below, shall, except as provided in this Article, 
be subject to the laws and regulations of Japan. 

2. The designation referred to in paragraph 1 above shall be made upon con- 
sultation with the Government of Japan and shall be restricted to cases where 
open competitive bidding is not practicable due to security considerations, to 
the technical qualifications of the contractors involved, or to the unavailability 



51 



27 

of materials or services required by United States standards, or to limitations 
of United States law. 
The designation shall be withdrawn by the Government of the United States : 

(a) upon completion of contracts with the United States for the United States 
armed forces ; 

(b) upon proof that such persons are engaged in business activities in Japan 
other than those pertaining to the United States armed forces ; or 

(c) when such persons are engaged in practices illegal in Japan. 

3. Upon certification by appropriate United States authorities as to their 
identity, such persons and their employees shall be accorded the following 
benefits of this Agreement : 

(a) Rights of accession and movement, as provided for in Article V, para- 
graph 2 ; 

(b) Entry into Japan in accordance with the provisions of Article IX ; 

(c) The exemption from customs duties, and other such charges provided for 
in Article XI, paragraph 3, for members of the United States armed forces, the 
civilian component, and their dependents ; 

(d) If authorized by the Government of the United States, the right to use 
the services of the organizations provided for in Article XV ; 

(e) Those provided for in Article XIX, paragraph 2, for members of the 
armed forces of the United States, the civilian component, and their dependents ; 

(f) If authorized by the Government of the United States, the right to use 
military payment certificates, as provided for in Artcile XX ; 

(g) The use of postal facilities provided for in Article XXI; 

(h) Exemption from the laws and regulations of Japan with respect to terms 
and conditions of employment. 

4. Such persons and their employees shall be so described in their passports 
and their arrival, departure and their residence while in Japan shall from 
time to time be notified by the United States armed forces to the Japanese 
authorities. 

5. Upon certification by an authorized officer of the United States armed 
forces, depreciable assets except houses, held, used, or transferred, by such per- 
sons and their employees exclusively for the execution of contracts referred to in 
paragraph 1 shall not be subject to taxes or similar charges of Japan. 

6. Upon certification by an authorized otficer of the United States armed 
forces, such persons and their employees shall be exempt from taxation in Japan 
on the holding, use. transfer by death, or transfer to persons or agencies entitled 
to tax exemption under this Agreement, of movable property, tangible or intangi- 
ble, the presence of which in Japan is due solely to the temporary presence of 
these persons in Japan, provided that such exemption shall not apply to property 
held for the purpose of investment or the conduct of other business in Japan or 
to any intangible property registered in Japan. There is no obligation under this 
Article to grant exemption from taxes payable in respect of the use of roads by 
private vehicles. 

7. The persons and their employees referred to in paragraph 1 shall not be 
liable to pay income or corporation taxes to the Government of Japan or to any 
other taxing agency in Japan on any income derived under a contract made in 
the United States with the Government of the United States in connection with the 
construction, maintenance or operation of any of the facilities or areas covered 
by this Agreement. The provisions of this paragraph do not exempt such persons 
from payment of income or corporation taxes on income derived from Japanese 
sources, nor do they exempt such persons and their employees who, for United 
States income tax purposes, claim Japanese residence, from payment of Japanese 
taxes on income. Periods during which such persons are in Japan solely in con- 
nection with the execution of a contract with the Government of the United 
States shall not be considered periods of residence or domicile in Japan for the 
purposes of such taxation. 

8. Japanese authorities shall have the primary right to exercise jurisdiction 
over the persons and their employees referred to in paragraph 1 of this Article 
in relation to offenses committed in Japan and punishable by the law of Japan. 
In those cases in which the Japanese authorities decide not to exercise such 
jurisdiction they shall notify the military authorities of the United States as soon 
as possible. Upon such notification the military authorities of the United States 
shall have the right to exercise such jurisdiction over the persons referred to 
as is conferred on them by the law of the United States. 



52 



28 



ARTICLE XV 

1. (a) Navy exchanges, post exchanges, messes, social clubs, theaters, news- 
papers and other non-appropriated fund organizations authorized and regulated 
by the United States military authorities may be established in the facilities and 
areas in use by the United States armed forces for the use of members of such 
forces, the civilian component, and their dependents. Except as otherwise pro- 
vided in this Agreement, such organizations shall not be subject to Japanese regu- 
lations, license, fees, taxes or similar controls. 

(b) When a newspaper authorized and regulated by the United States military 
authorities is sold to the general public, it shall be subject to Japanese regula- 
tions, license, fees, taxes or similar controls so far as such circulation is 
concerned. 

2. X.) Japanese tax shall be imposed on sales of merchandise and services by 
such organizations, except as provided in paragraph 1(b), but purchases within 
Japan of merchandise and supplies by such organizations shall be subject to 
Japanese taxes. 

8. Except as such disposal may be authorized by the United States and Japa- 
nese authorities in accordance with mutually agreed conditions, goods which 
are sold by such organizations shall not be disposed of in Japan to persons not 
aut horized to make purchases from such organizations. 

4. The organizations referred to in this Article shall provide such information 
to the Japanese authorities as is required by Japanese tax legislation. 

ARTICLE xvi 

It is the duty of members of the United States armed forces, the civilian com- 
ponent, and their dependents to respect the law of Japan and to abstain from 
any activity inconsistent with the spirit of this Agreement, and in particular, 
from any political activity in Japan. 

ARTICLE XVII 

1. Subject to the provisions of this Article. 

(a) the military authorities of the United States shall have the right to exer- 
cise within Japan all criminal and disciplinary jurisdiction conferred on them 
by the law of the United States over all persons subject to the military law of 
the United States ; 

(b) the authorities of Japan shall have jurisdiction over the members of the 
TJnited States armed forces, the civilian component, and their dependents with 
respect to offenses committed within the territory of Japan and punishable by 
the law of Japan. 

2. (a) The military authorities of the United States shall have the right to 
exercise exclusive jurisdiction over persons subject to the military law of the 
United States with respect to offenses, including offenses relating to its security, 
punishable by the law of the United States, but not by the law of Japan. 

(b) The authorities of Japan shall have the right to exercise exclusive juris- 
diction over members of the United States armed forces, the civilian component, 
and their dependents with respect to offenses, including offenses relating to the 
security of Japan, punishable by its law but not bv the law of the United States. 

(c) For the purposes of this paragraph and of paragraph 3 of this Article a 
security offense against a State shall include (i) treason against the State: 
(ii) sabotage, espionage or violation of any law relating to official secrets of 
that State, or secrets relating to the national defense of that State. 

3. In cases where the right to exercise jurisdiction is concurrent the following 
rules shall apply : 

(a) The military authorities of the United States shall have the primary right 
to exercise jurisdiction over members of the United States armed forces or the 
civilian component in relation to: (i) offenses solely against the property or 
security of the United States, or offenses solely against the person or property 
of another member of the United States armed forces or the civilian component 
or of a dependent: (ii) offenses arising out of any act or omission done in the 
performance of official duty. 

(b) In the case of any other offense the authorities of Japan shall have the 
primary right to exercise jurisdiction. 



53 



29 

(c) If the State having the primary right decides not to exercise jurisdiction, 
it shall notify the authorities of the other State as soon as practicable. The 
authorities of the State having the primary right shall give sympathetic consid- 
eration to a request from the authorities of the other State for a waiver of its 
right in cases where that other State considers such waiver to be of particular 
importance. 

4. The foregoing provisions of this Article shall not imply any right for the 
military authorities of the United States to exercise jurisdiction over persons 
who are nationals of or ordinarily resident in Japan, unless they are members of 
the United States armed forces. 

5. (a) The military authorities of the United States and the authorities of 
Japan shall assist each other in the arrest of members of the United States 
armed forces, the civilian component, or their dependents in the territory of 
Japan and in handing them over to the authority which is to exercise jurisdic- 
tion in accordance with the above provisions. 

(b) The authorities of Japan shall notify promptly the military authorities 
of the United States of the arrest of any member of the United States armed 
forces, the civilian component, or a dependent. 

(c) The custody of an accused member of the United States armed forces or 
the civilian component over whom Japan is to exercise jurisdiction shall, if he is 
in the hands of the United States, remain with the United States until he is 
charged by Japan. 

6. (a) The military authorities of the United States and the authorities of 
Japan shall assist each other in the carrying out of all necessary investigations 
into offenses, and in the collection and production of evidence, including the 
seizure and, in proper cases, the handing over of objects connected with an 
offense. The handing over of such objects may, however, be made subject to 
their return within the time specified by the authority delivering them. 

(b) The military authorities of the United States and the authorities of Japan 
shall notify each other of the disposition of all cases in which there are con- 
current rights to exercise jurisdiction. 

7. (a) A death sentence shall not be carried out in Japan by the military 
authorities of the United States if the legislation of Japan does not provide for 
such punishment in a similar case. 

(b) The authorities of Japan shall give sympathetic consideration to a request 
from the military authorities of the United States for assistance in carrying 
out a sentence of imprisonment pronounced by the military authorities of the 
United States under the provisions of this Article within the territory of Japan. 

8. Where an accused has been tried in accordance with the provisions of this 
Article either by the military authorities of the United States or the authorities 
of Japan and has been acquitted, or has been convicted and is serving, or has 
served, his sentence or has been pardoned, he may not be tried again for the same 
offense within the territory of Japan by the authorities of the other State. How- 
ever, nothing in this paragraph shall prevent the military authorities of the 
United States from trying a member of its armed forces for any violation of rules 
of discipline arising from an act or omission which constituted an offense for 
which he was tried by the authorities of Japan. 

9. Whenever a member of the United States armed forces, the civilian compo- 
nent or a dependent is prosecuted under the jurisdiction of Japan he shall be 
entitled : 

( a ) to a prompt and speedy trial ; 

(b) to be informed, in advance of trial, of the specific charge or charges made 
against him; 

( c ) to be confronted with the witnesses against him ; 

(d) to have compulsory process for obtaining witnesses in his favor, if they 
are within the jurisdiction of Japan ; 

(e) to have legal representation of his own choice for his defense or to have 
free or assisted legal representation under the conditions prevailing for the time 
being in Japan ; 

(f) if he considers it necessary, to have the services of a competent inter- 
preter ; and 

(g) to communicate with a representative of the Government of the United 
States and to have such a representative present at his trial. 

10. (a) Regularly constituted military units or formations of the United States 
armed forces shall have the right to police any facilities or areas which they use 



54 



30 

under Article II of this Agreement. The military police of such forces may take 
all appropriate measures to ensure the maintenance of order and security within 
such facilities and areas. 

i hi Outside these facilities and areas, such military police shall he employed 
only suhject to arrangements with the authorities of Japan and in liaison with 
those authorities, and in so far as such employment is necessary to maintain 
discipline and order among the members of the United States armed forces. 

11. In the event of hostilities to which the provisions of Article V of the Treaty 
of Mutual Cooperation and Security apply, either the Government of the United 
States or the Government of Japan shall have the right, hy giving sixty days' 
notice to the other, to suspend the application of any of the provisions of this 
Article. If this right is exercised, the Governments of the United States and 
Japan shall immediately consult with a view to agreeing on suitable provisions 
to replace the provisions suspended. 

12. The provisions of this Article shall not apply to any offenses committed 
before the entry into force of this Agreement. Such cases shall he governed by 
the provisions of Article XVII of the Administrative Agreement under Article 
III of the Security Treaty between the United States of America and Japan, as 
it existed at the relevant time, 

ARTICLE XYJ1I 

1. Each Party waives all its claims against the other Party for damage to any 
property owned by it and used by its land, sea or air defense services, if such 
damage — 

(a) was caused by a member or an employee of the defense services of the 
other Party in the performance of his official duties ; or 

(b) arose from the use of any vehicle, vessel or aircraft owned hy the other 
Party and used hy its defense services, provided either that the vehicle, vessel 
or aircraft causing the damage was being used for official purposes, or that the 
damage was caused to property being so used. 

Claims for maritime salvage by one Party against the other Party shall he 
waived, provided that the vessel or cargo salved was owned hy a Party and being 
used hy its defense services for official purposes. 

2. (a) In the case of damage caused or arising as stated in paragraph 1 to 
other property owned hy either Party and located in Japan, tiie issue of the 
liability of the other Party shall be determined and the amount of damage shall 
be assessed, unless the two Governments agree ofherwi>e. by a sole arbitrator 
selected in accordance with subparagraph (h) of this paragraph. The arbitrator 
shall also decide any counter-claims rising out of the same incident. 

(b) The arbitrator referred to in subparagraph (a) al»ove *hall be selected 
by agreement between the two Governments from amongst the nationals of Japan 
who hold or have held high judicial office. 

(o) Any decision taken by the arbitrator shall be binding and conclusive upon 
the Parties. 

(d) The amount of any compensation awarded by the arbitrator shall be 
distributed in accordance with the provisions of paragraph 5(e) (i), (ii), and 
(iii) of this Article. 

(e) The compensation of the arbitrator shall he fixed hy agreement between 
the two Governments and shall together with the necessary expenes incidental 
to the ]>erforniance of Irs duties, he defrayed in eoual proportions by them. 

(fl Nevertheless, each Party waives its claim in any such case up to the 
amount of 1,400 United States dollars or 504.000 yen. In the case of cons : derable 
variation in the rate of exclumge between these currencies the two Governments 
shall airree on the appropriate adjustments of these amounts. 

3. For the purposes of paragraphs 1 and 2 of this Article the expression 
"owned by a Party" in the case of a vessel includes a vessel on bare boat charter 
t" t-^at Party or reouisitioned bv if on bare boat terms or seized by if in prize 
(ex cent to the extent that the risk of loss or liability is borne by some person 
other than such Party). 

4. Eaeft Party waives all its claims against the other Party for injury or 
de*th suffered by any member of its defense services while such member was 
engia&pd in the performance of his official duties. 

5. Claims (other than contractual claims and those to which paragraphs or 
7 of this Article apply) arising out of facts- or omissions of members or employees 
of the United States armed forces done in the performance of official duty, or 



55 



31 

out of any other act, omission or occurrence for which the United States armed 
forces are legally responsible, and causing damage in Japan to third parties, 
other than the Government of Japan, shall be dealt with by Japan in accordance 
with the following provisions : 

(a) Claims shall be Sled, considered and settled or adjudicated in accordance 
with the laws and regulations of Japan with respect to claims arising from the 
activities of its Self -Defense Forces. 

(b) Japan may settle any such claims, and payment of the amount agreed 
upon or determined by adjudication shall be made by Japan in yen. 

(c) Such payment, whether made pursuant to a settlement or to adjudication 
of the case by a competent tribunal of Japan, or the final adjudication by such a 
tribunal denying payment, shall be binding and conclusive upon the Parties. 

(d) Every claim paid by Japan shall be communicated to the appropriate 
United States authorities together with full particulars and a proposed distribu- 
tion in conformity with subparagraphs (e) (i) and (ii) below. In default of a 
reply within two months, the proposed distribution shall be regarded as accepted. 

(e) The cost incurred in satisfying claims pursuant to the preceding subpara- 
graphs and paragraph 2 of this Article shall be distributed between the Parties 
as follows : 

(i) Where the United States alone is responsible, the amount awarded or ad- 
judged shall be distributed in the proportion of 25 percent chargeable to Japan 
and 75 percent chargeable to the United States. 

(ii) Where the United States and Japan are responsible for the damage, the 
amount awarded or adjudged shall be distributed equally between them. Where 
the damage was caused by the defense services of the United States or Japan 
and it is not possible to attribute it specifically to one or both of those defense 
services, the amount awarded or adjudged shall be distributed equally between 
the United States and Japan. 

(iii) Every half-year, a statement of the sums paid by Japan in the course of 
the half-yearly period in respect of every case regarding which the proposed dis- 
tribution on a percentage basis has been accepted, shall be sent to the appropriate 
United States authorities, together with a request for reimbursement. Such reim- 
bursement shall be made, in yen, within the shortest possible time. 

(f ) Members or employees of the United States armed forces, excluding those 
employees who have only Japanese nationality, shall not be subject to any pro- 
ceedings for the enforcement of any judgment given against them in Japan in a 
matter arising from the performance of their official duties. 

(g) Except in so far as subparagraph (e) of this paragraph applies to claims 
covered by paragraph 2 of this Article, the provisions of this paragraph shall not 
apply to any claim arising out of or in connection with the navigation or opera- 
tion of a ship or the loading, carriage, or discharge of a cargo, other than claims 
for death or personal injury to which paragraph 4 of this Article does not apply. 

6. Claims against members or employees of the United States armed forces 
(except employees who are nationals of or ordinarily resident in Japan) arising 
out of tortious acts or omissions in Japan not done in the performance of official 
duty shall be dealt with in the following manner : 

(a) The authorities of Japan shall consider the claim and assess com- 
pensation to the claimant in a fair and just manner, taking into account all 
the circumstances of the case, including the conduct of the injured person, 
and shall prepare a report on the matter. 

(b) The report shall be delivered to the appropriate United States au- 
thorities who shall then decide without delay whether they will offer an ex 
gratia payment, and if so, of what amount. 

(c) If an offer of ex gratia payment is made, and accepted by the claimant 
in full satisfaction of his claim, the United States authorities shall make the 
payment themselves and inform the authorities of Japan of their decision 
and of the sum paid. 

(d) Nothing in this paragraph shall affect the jurisdiction of the courts 
of Japan to entertain an action against a member or an employee of the 
United States armed forces unless and until there has been payment in full 
satisfaction of the claim. 

7. Claims arising out of the unauthorized use of any vehicle of the United 
States armed forces shall be dealt with in accordance with paragraph 6 of this 
Article, except in so far as the United States armed forces are legally responsible. 



56 



32 

8. If a dispute arises as to whether a tortious act or omission of a member or 
an employee of the United States armed forces was done in the performance of 
official duty or as to whether the use of any vehicle of the United States armed 
forces was unauthorized, the question shall he submitted to an arbitrator ap- 
pointed in accordance with paragraph 2(b) of this Article, whose decision on 
this point shall be final and conclusive. 

9. (a) The United States shall not claim immunity from the jurisdiction of 
the courts of Japan for members or employees of the United States armed forces 
in respect of the civil jurisdiction of the courts of Japan except to the extent 
provided in paragraph 5(f) of this Article. 

(b) in case any private movable property, excluding that in use by the United 
States armed forces, which is subject to compulsory execution under Japanese 
law, is within the facilities and areas in use by the United States armed forces, 
the United States authorities shall, ui>on the request of Japanese courts, possess 
and turn over such property to the Japanese authorities. 

(c) The authorities of the United States and Japan shall cooperate in the 
procurement of evidence for a fair hearing and disposal of claims under this 
Article. 

10. Disputes arising out of contracts concerning the procurement of materials, 
supplies, equipment, services and labor by or for the United States armed forces, 
which are not resolved by the parties to the contract concerned, may be sub- 
mitted to the Joint Committee for conciliation, provided that the provisions of 
this paragraph shall not prejudice any right which the parties to the contract 
may have to file a civil suit. 

11. The term "defense services" used in this Article is understood to mean for 
Japan its Self-Pefense Forces and for the United States its armed forces. 

12. Paragraphs 2 and 5 of this Article shall apply only to claims arising inci- 
dent to non-combat activities. 

18. The provisions of this Article shall not apply to any claims which arose 
before the entry into force of this Agreement. Such claims shall be dealt with by 
the proivsions of Article XVITI of the Administrative Agreement under Article 
III of the Security Treaty between the United States of America and Japan. 

ARTICLE xix 

1. Members of the United States armed forces, the civilian component, and 
their dependents, shall be subject to the foreign exchange controls of the Gov- 
ernment of Japan. 

2. The preceding paragraph shall not be construed to preclude the transmission 
into or outside of Japan of United States dollars or dollar instruments repre- 
senting the official funds of the United States or realized as a result of service 
or employment in connection with this Agreement by members of the United 
States armed forces and the civilian component, or realized by such persons and 
their dependents from sources outside of Japan. 

3. The United States authorities shall take suitable measures to preclude the 
abuse of the privileges stipulated in the preceding paragraph or circumvention 
of the Japanese foreign exchange controls. 

ARTICLE XX 

1. (a) United States military payment certificates denominated in dollars 
may be used by persons authorized by the United States for internal transactions 
within the facilities and areas in use by the United States armed forces. The 
Government of the United States will take appropriate action to insure that 
authorized personnel are prohibited from engaging in transactions involving 
military payment certificates except as authorized by United States regulations. 
The government of Japan will take necessary action to prohibit unauthorized 
persons from engaging in transactions involving military payment certificates 
and with the aid of United States authorities will undertake to apprehend and 
punish any person or persons under its jurisdiction involved in the counterfeiting 
or uttering of counterfeit military payment certificates. 

(b) It is agreed that the United States authorities will apprehend and punish 
members of the United States armed forces, the civilian component, or their 
dependents, who tender military payment certificates to unauthorized persons 
and that no obligation will be due to such unauthorized persons or to the Govern- 



57 



33 

ment of Japan or its agencies from the United States or any of its agencies as a 
result of any unauthorized use of military payment certificates within Japan. 

2. In order to exercise control of military payment certificates the United 
States may designate certain American financial institutions to maintain and 
operate, under United States supervision, facilities for the use of persons author- 
ized by the United States to use military payment certificates. Institutions au- 
thorized to maintain military banking facilities will establish and maintain such 
facilities physically separated from their Japanese commercial banking business, 
with personnel whose sole duty is to maintain and operate such facilities. Such 
facilities shall be permitted to maintain United States currency bank accounts 
and to perform all financial transactions in connection therewith including receipt 
and remission of funds to the extent provided by Article XIX, paragraph 2, of 
this Agreement. 

ARTICLE XXI 

The United States may establish and operate, within the facilities and areas 
in use by the United States armed forces, United States military post offices 
for the use of members of the United States armed forces, the civilian com- 
ponent, and their dependents, for the transmission of mail between United 
States military post offices in Japan and between such military post offices and 
other United States post offices. 

ARTICLE XXII 

The United States may enroll and train eligible United States citizens resid- 
ing in Japan, who apply for such enrollment, in the reserve organizations of 
the armed forces of the United States. 

article xxiri 

The United States and Japan will cooperate in taking such steps as may from 
time to time be necessary to ensure the security of the United States armed 
forces, the members thereof, the civilian component, their dependents, and their 
property. The Government of Japan agrees to seek such legislation and to take 
such other action as may be necessary to ensure the adequate security and pro- 
tection within its territory of installations, equipment, property, records and 
official information of the United States, and for the punishment of offenders 
under the applicable laws of Japan. 

article xxiv 

1. It is agreed that the United States will bear for the duration of this Agree- 
ment without cost to Japan all expenditures incident to the maintenance of 
the United States armed forces in Japan except those to be borne by Japan 
as provided in Articles II and III. 

2. It is agreed that Japan will furnish for the duration of this Agreement 
without cost to the United States and make compensation where appropriate 
to the owners and suppliers thereof all facilities and areas and rights of way, 
including facilities and areas jointly used such as those at airfields and ports, 
as provided in Articles II and III. 

3. It is agreed that arrangements will be effected between the Governments 
of the United States and Japan for accounting applicable to financial transac- 
tions arising out of this Agreement. 

ARTICLE XXV 

1. A Joint Committee shall be established as the means for consultation be- 
tween the Government of the United States and the Government of Japan on 
all matters requiring mutual consultation regarding the implementation of this 
Agreement. In particular, the Joint Committee shall serve as the means for 
consultation in determining the facilities and areas in Japan which are required 
for the use of the United States in carrying out the purposes of the Treaty 
of Mutual Cooperation and Security. 

2. The Joint Committee shall be composed of a representative of the Govern- 
ment of the United States and a representative of the Government of Japan, 
each of whom shall have one or more deputies and a staff. The Joint Committee 



5S 



ZA 

shall determines its own procedures, and arrange for such auxiliary organs and 
administrative services as may be required. The Joint Committee shall be so 
organized that ii may meet Immediately at any time at the request of the repre- 
sentative ot either the Government of the United suites or the Government of 
Japan. 

It' the Joint Committee is unable to resolve any matter, it shall refer that 
matter to tim respective Governments for further consideration through appro- 
priate channels. 

ARTICLE XXVI 

1. This Agreement shall be approved by the United States and Japan in accord- 
ance with their legal procedures, and notes indicating such approval shall he 
exchanged. 

2. After the procedure set forth in the preceding paragraph has been followed, 
this Agreement will enter into force on the date of coining into force of the 
Treaty of Mutual Cooperation and Security, at which time the Administrative 
Agreement under Article III of the Security Treaty between the United States 
of America and Japan, signed at Tokyo on February 28, 19o2, as amended, shall 
expire. 

8. The Government of each Party to this Agreement undertakes to seek from 
its legislature necessary budgetary and legislative action with respect to pro- 
visions of this Agreement which require such action for their execution. 

ARTICLE XXVII 

Either Government may at any time request the revision of any Article of this 
Agreement, in which case the two Governments shall enter into negotiation 
through appropriate channels. 

ARTICLE XXVIII 

This Agreement, and agreed revision thereof, shall remain in force while the 
Treaty of Mutual Cooperation and Security remains in force unless earlier termi- 
nated by agreement between the two Governments. 

In witness whereof the undersigned Plenipotentiaries have signed this Agree- 
ment. 

Done at Washington, in duplicate, in the English and Japanese languages, both 
texts equally authentic, this 19th day of January. 1960. 
For the United States of America : 

Christian A. Herter, 
Poi'Glas MacArthur 2nd, 
J. Graham Parsons. 

For Japan : 

Nobusuke Kishi, 
Aiichiko Fujiyama, 
Mitsujiro Ishii, 
Tadashi Ad ac hi, 
Koichiro Asakai. 

Agreed Minutes to the Agreement Under Article VI oe the Treaty oe Mutual 
Cooperation and Security Between the United States of America and Japan. 
Pegardixg Facilities and Areas and the Status of United States Armed 
Forces in Japan 

The Plenipotentiaries of the United States of America and Japan wish to record 
the following understanding which they have reached during the negoitations for 
the Agreement under Article VI of the Treaty of Mutual Cooperation and Secu- 
rity between the United States of America and Japan, Regarding Facilities and 
Areas and the Status of United States Armed Forces in Japan, signed today: 

ARTICLE III 

The measures that may be taken by the United States under paragraph 1 shall, 
to the extent necessary to accomplish the purposes of this Agreement, include, 
inter alia, the following: 

1. To construct (including dredging and filling), operate, maintain, utilize, 
occupy, garrison and control the facilities and areas; 



59 



35 

' 2. To remove buildings or structures, make alterations, attach fixtures, or 
erect additions thereto and to construct any additional buildings or structures 
together with auxiliary facilities ; 

3. To improve and deepen the harbors, channels, entrances and anchorages, 
and to construct or maintain necessary roads and bridges affording access to 
such facilities and areas ; 

4. To control (including measures to prohibit) in so far as may be required by 
military necessity for the efficient operation and safety of the facilities and 
areas, anchorages, moorings, landings, takeoffs and operation of ships and water- 
borne craft, aircraft and other vehicles on w T ater, in the air or on land comprising, 
or in the vicinity of, the facilities and areas ; 

5. To construct on rights of way utilized by the United States such wire and 
radio communications facilities, including submarine and subterranean cables, 
pipe lines and spur tracks from railroads, as may be required for military pur- 
poses ; and 

6. To construct, install, maintain and employ in any facility or area any type 
of installation, weapon, substance, device, vessel or vehicle on or under the 
ground, in the air or on or under the water that may be requisite or appropriate 
including meterological systems, aerial and water navigation lights, radio and 
radar apparatus and eletronic devices. 

article v 

1. "United States and foreign vessels . . . operated by, for, or under the control 
of the United States for official purposes" mean United States public vessels and 
chartered vessels (bare boat charter, voyage charter and time charter). Space 
charter is not included. Commercial cargo and private passengers are carried 
by them only in exceptional cases. 

2. The Japanese ports mentioned herein will ordinarily mean "open ports." 

3. The exemption from making "appropriate notification" will be applicable only 
to exceptional cases where such is required for security of the United States 
armed forces or similar reasons. 

4. The laws and regulations of Japan will be applicable except as specifically 
provided otherwise in this Article. 

ARTICLE VII 

The problem of telecommunications rates applicable to the United States armed 
forces will continue to be studied in the light of, inter alia, the statements concern- 
ing Article VII recorded in the official minutes of the Tenth Joint Meeting for 
the Negotiation of the Administrative Agreement signed on February 28, 1952, 
which are hereby incorporated by reference. 

ARTICLE IX 

The Government of Japan will be notified at regular intervals, in accordance 
with procedures to be agreed between the two Governments, of numbers and cate- 
gories of persons entering and departing. 

ARTICLE XI 

1. The quantity of goods imported under paragraph 2 by the organizations 
provided for in Article XV for the use of the members of the Untied States armed 
forces, the civilian component, and their dependents shall be limited to the extent 
reasonably required for such use. 

2. Paragraph 3(a) does not require concurrent shipment of goods w T ith travel of 
owner nor does it require single loading or shipment. 

3. The term "military cargo" as used in paragraph 5(c) is not confied to arms 
and equipment but refers to all cargo shipped to the United States armed forces 
on a United States Government bill of lading, the term "military cargo" being 
used to distinguish cargo shipped to the United States armed forces from cargo 
shipped to other agencies of the United States Government. 

4. The United States armed forces will take every practicable measure to ensure 
that goods will not be imported into Japan by or for the members of the United 
States armed forces, the civilian component, pr their dependents, the entry of 



79-905 O - 76 - 5 



60 



36 

which would be in violation of Japanese customs laws and regulations., The 
United States armed forces will promptly notify the Japanese customs authorities 
whenever the entry of such goods is discovered. 

5. The Japanese customs authorities may, if they consider that there has been 
an abuse or infringement in connection with the entry of goods under Article XI, 
take up the matter with the appropriate authorities of the United States armed 
forces. 

6. The words "The United States armed forces shall render all assistance within 
their power etc." in paragraph 9(b) and (c) refer to reasonable and practicable 
measures by the United States armed forces. 

ARTICLE XII 

1. The United States armed forces will furnish the Japanese authorities with 
appropriate information as far in advance as practicable on anticipated major 
changes in their procurement program in Japan. 

2. The problem of a satisfactory settlement of difficulties with respect to pro- 
curement contracts arising out of differences between United States and Japa- 
nese economic laws and business practices will be studied by the Joint Commit- 
tee or other appropriate persons. 

3. The procedures for securing exemptions from taxation on purchases of 
goods for ultimate use by the United States armed forces will be as follows : 

a. Upon appropriate certification by the United States armed forces that ma- 
terials, supplies and equipment consigned to or destined for such forces, are to 
he used, or wholly or partially used up, under the supervision of such forces, ex- 
clusively in the execution of contracts for the construction, maintenance or oper- 
ation of the facilities and areas referred to in Article II or for the support of the 
forces therein, or are ultimately to be incorporated into articles or facilities used 
by such forces, an authorized representative of such forces shall take delivery 
of such materials, supplies and equipment directly from manufacturers thereof. 
In such circumstances the collection of commodity and gasoline taxes shall be 
held in abeyance. 

ft. The receipt of such materials, supplies and equipment in the facilities and 
areas shall he confirmed by an authorized officer of the United States armed 
forces to the Japanese authorities. 

c. Collection of commodity and gasoline taxes shall be held in abeyance until : 

(1) The United States armed forces confirm and certify the quantity or degree 
of consumption of the above referred to materials, supplies and equipment; or 

(2) The United States armed forces confirm and certify the amount of the above 
referred to materials, supplies, and equipment which have been incorporated into 
articles or facilities used by United States armed forces. 

d. Materials, supplies, and equipment certified under c(l) or (2) shall be ex- 
empt from commodity and gasoline taxes insofar as the price thereof is paid 
out of United States Government appropriations or out of funds contributed by 
the Japanese Government for disbursement by the United States. 

4. The Government of the United States shall ensure that the Government of 
Japan is reimbursed for costs incurred under relevant contracts between appro- 
priate authorities of the Government of Japan and the organizations provided 
for in Article XV in connection with the employment of workers to be provided 
for such organizations. 

5. It is understood that the term "the legislation of Japan" mentioned in para- 
graph 5, article XII includes decisions of the courts and the Labor Relations Com- 
missions of Japan, subject to the provisions of paragraph 6, Article XII. 

6. It is understood that the provisions of Article XII, paragraph 6 shall apply 
only to discharges for security reasons including disturbing the maintenance of 
military discipline within the facilities and areas used by the United States armed 
forces. 

7. It is understood that the organizations referred to in Article XV will be 
subject to the procedures of paragraph 6 on the basis of mutual agreement be- 
tween the appropriate authorities. 

ARTICLE XIII 

With respect to Article XIII, paragraph 2 and Article XIV, paragraph 7, in- 
come payable in Japan as a result of service with or employment by the United 



61 



37 

States armed forces or by the organizations provided for in Article XV, or under 
•contract made in the United States with the United States Government, shall 
not be treated or considered income derived from Japanese sources. 

ARTICLE xv 

The facilities referred to in paragraph 1 may be used by other officers and 
personnel of the United States Government ordinarily accorded such privileges 
abroad. 

ARTICLE XVII 

Re paragraph 1(a) and paragraph 2(a) : 

"The scope of persons subject to the military laws of the United States shall 
be communicated, through the Joint Committee, to the Government of Japan by 
the Government of the United States." 

Re paragraph 2(c) : 

"Both Governments shall inform each other of the details of all the security 
offenses mentioned in this subparagraph and the provisions governing such of- 
fenses in the existing laws of their respective countries." 

Re paragraph 3(a) (ii) : 

"Where a member of the United States armed forces or the civilian component 
is charged with an offense, a certificate issued by or on behalf of his commanding 
officer stating that the alleged offense, if committed by him, arose out of an act 
or omission done in the performance of official duty, shall, in any judicial pro- 
ceedings, be sufficient evidence of the fact unless the contrary is proved. 

The above statement shall not be interpreted to prejudice in any way Article 
318 of the Japanese Code of Criminal Procedure." 

Re paragraph 3(c) : 

"1. Mutual procedures relating to waivers of the primary right to exercise 
jurisdiction shall be determined by the Joint Committee. 

"2. Trials of cases in which the Japanese authorities have waived the primary 
right to exercise jurisdiction, and trials of cases involving offenses described in 
paragraph 3(a) (ii) committed against the State or nationals of Japan shall be 
held promptly in Japan within a reasonable distance from the places where the 
offenses are alleged to have taken place unless other arrangements are mutually 
agreed upon. Representatives of the Japanese authorities may be present at such 
trials." 

Re paragraph 4: 

"Dual nationals, United States and Japanese, who are subject to the military 
law of the United States and are brought to Japan by the United States shall 
not be considered as nationals of Japan, but shall be considered as United States 
nationals for the purposes of this paragraph." 

Re paragraph 5 : 

"1. In case the Japanese authorities have arrested an offender who is a member 
of the United States armed forces, the civilian component, or a dependent subject 
to the military law of the United States with respect to a case over which Japan 
has the primary right to exercise jurisdiction, the Japanese authorities will, 
unless they deem that there is adequate cause and necessity to retain such 
offender, release him to the custody of the United States military authorities 
provided that he shall, on request, be made available to the Japanese authorities, 
if such be the condition of his release. The United States authorities shall, on 
request, transfer his custody to the Japanese authorities at the time he is 
indicted by the latter. 

"2. The United States military authorities shall promptly notify the Japanese 
authorities of the arrest of any member of the United States armed forces, the 
civilian component or a dependent in any case in which Japan has the primary 
right to exercise jurisdiction." 

Re paragraph 9 : 

"1. The rights enumerated in items (a) through (e) of this paragraph are 
guaranteed to all persons on trial in Japanese courts by the provisions of the 
Japanese Constitution. In addition to these rights, a member of the United 
States armed forces, the civilian component or a dependent who is prosecuted 
under the jurisdicition of Japan shall have such other rights as are guaranteed 
under the laws of Japan to all persons on trial in Japanese courts. Such addi- 



62 



38 

tiona] rights include the following which are guaranteed under the Japanese 
Constitution : 

"(a) He shall not he arrested or detained without being at once informed of 
the charge against him or without the immediate privilege of counsel; nor shall 
be be detained without adequate cause; and upon demand of any person such 
cause must be immediately shown in open court in his presence and the presence 
ol his counsel ; 

l> | He shall enjoy the right to a public trial by an impartial tribunal ; 
•'(c) He shall not be compelled to testify against himself ; 
'•(d) He shall be permitted full opportunity to examine all witnesses ; 
"(e) No cruel punishments shall be imposed upon him. 

"2. The United States authorities shall have the right upon request to have 
access at any time to members of the United States armed forces, the civilian 
component, or their dependents who are confined or detained under Japanese 
authority. 

Nothing in the provisions of paragraph 9(g) concerning the presence of a 
representative of the United States Government at the trial of a member of the 
United States armed forces, the civilian component or a dependent prosecuted 
under the jurisdiction of Japan, shall he so construed as to prejudice the provi- 
sions of the Japanese Constitution with respect to public trials." 
Re paragraphs 10(a) and 10(b) : 

"1. The United States military authorities will normally make all arrests 
within facilities and areas in use by and guarded under the authority of the 
United States armed forces. This shall not preclude the Japanese authorities 
from making arrests within facilities and areas in cases where the competent 
authorities of the United States armed forces have given consent, or in cases of 
pursuit of a flagrant offender who has committed a serious crime. 

Where persons whose arrest is desired by the Japanese authorities and who 
are not subject to the jurisdiction of the United States armed forces are within 
facilities and areas in use by the United States armed forces, the United States 
military authorities will undertake, upon request, to arrest such persons. All 
persons arrested by the United States military authorities, who are not sub- 
ject to the jurisdiction of the United States armed forces, shall immediately 
be turned over to the Japanese authorities. 

'"The United States military authorities may, under due process of law, arrest 
in the vicinity of a facility or area any person in the commission or attempted 
commission of an offense against the security of that facility or area. Any such 
person not subject to the jurisdiction of the United States armed forces shall be 
immediately turned over to the Japanese authorities. 

'"2. The Japanese authorities will normally not exercise the right of search, 
seizure, or inspection with respect to any persons or property within facilities 
and areas in use by and guarded under the authority of the United States armed 
forces or with respect to property of the United States armed forces wherever 
situated, except in cases where the competent authorities of the United States 
armed forces consent to such search, seizure, or inspection by the Japanese 
authorities of such persons or property. 

"Where search, seizure, or inspection with respect to persons or property 
within facilities and areas in use by the United States armed forces or with 
respect to property, of the United States armed forces in Japan is desired by 
the Japanese authorities, the United States military authorities will undertake,, 
upon request, to make such search, seizure, or inspection. In the event of a 
judgment concerning such property, except property ow r ned or utilized by the 
United States Government or its instrumentalities, the United States will turn 
over such property to the Japanese authorities for disposition in accordance 
with the judgment." 

ARTICLE XIX 

Payment in Japan by the United States armed forces and by those organiza- 
tions provided in Article XV to persons other than members of the United States 
armed forces, civilian component, their dependents and those persons referred 
to in Article XIV shall be effected in accordance with the Japanese Foreign 
Exchange Control Law and regulations. In these transactions the basic rate of 
exchange shall be used. 

ARTICLE xxi 

United States military post offices may be used by other officers and personnel 
of the United States Government ordinarily accorded such privileges abroad. 



63 



39 

ARTICLE XXIV 

It is understood that nothing in this Agreement shall prevent the United States 
from utilizing, for the defrayment of expenses which are to be borne by the 
United States under this Agreement, dollar or yen funds lawfully acquired by 
the United States. 

Washington, January 19, 1960. 

C. A. H.« 
N.K 



Department of State, 
Wastiinyton, January 19, 1960. 

His Excellency Xobuslke Kishi, 
Prime Minister of Japan. 

Excellency: I have the honor to refer to paragraph 6(d) of Article XII of 
the Agreement under Article VI of the Treaty of Mutual Cooperation and Secu- 
rity between the United States of America and Japan, Regarding Facilities and 
Areas and the Status of United States Armed Forces in Japan, signed today. The 
second sentence of the said paragraph provides that "in such case the Govern- 
ment of the United States shall pay to the Government of Japan an amount equal 
to the cost of employment of the worker for a period of time to be agreed between 
the two Governments." 

I wish to propose on behalf of the Government of the United States that the 
period of time mentioned above shall not exceed one year after the notification 
provided for in paragraph 6(b) of Article XII of the above-cited Agreement, and 
may be determined in the consultations under paragraph 6(c) of Article XII 
above on the basis of mutually agreeable criteria. 

If the proposal made herein is acceptable to the Government of Japan, this 
Xote and Your Excellency's reply to that effect shall be considered as constituting 
an agreement between the two Governments. 

Accept, Excellency, the renewed assurances of my highest consideration. 

Christian A. Herter, 
Secretary of State of the United States of America. 



Washington, January 19, 1960. 

His Excellency Christian A. Herter, 

Secretary of State of the United States of America. 

Excellency : I have the honour to acknowledge the receipt of Your Excellency's 
Xote of today's date, which reads as follows : 

"I have the honor to refer to paragraph 6(d) of Article XII of the Agreement 
under Article VI of the Treaty of Mutual Cooperation and Security between the 
United States of America and Japan, Regarding Facilities and Areas and the 
Status of United States Armed Forces in Japan, signed today. The second sen- 
tence of the said paragraph provides that 'in such case the Government of the 
United States shall pay to the Government of Japan an amount equal to the cost 
of employment of the worker for a period of time to be agreed between the two 
Governments. 

"I wish to propose on behalf of the Government of the United States that the 
period of time mentioned above shall not exceed one year after the notification 
provided for in paragraph 6(b) of Article XII of the above-cited Agreement, 
and may be determined in the consultations under paragraph 6(c) of Article XII 
above on the basis of mutually agreeable criteria. 

"If the proposal made herein is acceptable to the Government of Japan, this 
Xote and Your Excellency's reply to that effect shall be considered as constituting 
an agreement between the two Governments." 

I have the honour to inform Your Excellency that the Government of Japan 
accepts the above proposal of the Government of the United States, and to con- 
firm that your Xote and this reply are considered as constituting an agreement 
between the two Governments. 

I avail myself of this opportunity to renew to Your Excellency the assurances 
of my highest consideration. 

Xobusuke Kishi. 



3. "Defense of Japan" 

Defense White Paper — Summary, June 1976 
(Published by the Japanese Defense Agency) 

Japan's internal and external environments have undergone far-reaching- 
changes since 1970 when the last Defense White Paper was published. The cur- 
rent White Paper is designed partly to clarify the background against which 
the so-called "post Fourth Defense Buildup Plan" is being programmed, and 
primarily to give a wider segment of the public an understanding of the realities 
of the international environment, the basic concepts of our national defense and 
some facts about the self-defense forces. The Paper consists of four chapters : 
Chapter I : Trends of the International Situation. Chapter II : Defense Policies 
of Japan. Chapter III : The Public and Self-Defense Forces. Chapter IV : SDF 
and Their Major Activities. 

In Chapter I, the international situation is analyzed in terms of its relatively 
long range trends and with emphasis on the factors relevant to the concept of 
our national defense policies. The chapter also outlines the general implications 
and the respective roles of the collective security system and military power in 
the nuclear age ; it also elaborates factual data on the military presence around 
Japan. 

Readers will find in Chapter II explanations of our basic defense policies,, 
including the concept of a basic standing force which can be characterized as a 
basic defense capability. 

Chapter III is devoted to civilian control and other related issues indispens- 
able for understanding the fact that the self-defense forces are people's arms 
and their effectiveness depends on mutual trust. 

The last chapter includes factual information on the forces, their activities 
and some of the problems inherent to their organization. 

Chapter I. Trends of the International Situation 

1. COEXISTENCE AND STRUGGLE 

A. East-West relations 

(a) The United States and the Soviet Union, fearing the consequences of 
mutual use of nuclear arms with massive detructive power, have found that 
it is to their mutual interest to continue their dialogue on how to avoid crisis,, 
whatever their conflict of interests, and to adopt political and military measures 
necessary for accommodation. Thus East- West dialogue has continued in Europe 
where impressive military forces, including those of the two superpowers, 
directly confront each other ; and potential confrontations have been controlled 
in other regions of the world where the interests of the two powers are deeply 
involved. 

(b) In the background of this trend exists a military equilibrium based on a 
mutual nuclear deterrence between the United States and the Soviet Union or 
between Western and Eastern Europe. Also contributing to this trend is the 
common recognition that nations increasingly have to turn their eyes to their 
own problems, that military .expenditures would become too heavy to bear if 
they should increase as tension remains and grows, and that many global prob- 
lems are beyond resolution by military means only. In Asia, the Sino-United 
States rapprochement became to some extent a regional stabilizing factor ; but 
the region is far from stable because of its multiplicity which has no parallel 
in Europe but has long been inherent to Asia. 

(e) On the other hand, the world has faced a series of wide-ranging problems — 
population increase, poverty, resources, pollution, among others. In the 1970 s 
in particular, food, oil and other resources have become serious issues which 
impressed the world with the urgent need for international cooperation. The 
issues no longer remain purely economic but are today identified as problems 

(41) 



(65) 



66 



42 

directly relevant to national security. As a result, the growing need for inter- 
national Interdependence cannot fail to have a favorable impact on East-West 
relations. 

(d) However, the United States and the Soviet Union do not hide- the mutual 
distrust that lies underneath their detente; in fact, critical voices are constantly 
raised in their respective domestic scene against concessions and compromises 
related to detente. The United States interprets detente as a policy that governs, 
with limitations, the relations between superpowers who are essentially in a 
state of confrontation. The United States, therefore, seeks a more stabilized 
international order by, on one hand, maintaining sufficient military power neces- 
sary for a military equilibrium and, on the other, continuing her dialogue with 
Moscow. As for the Soviet Union, peaceful coexistence is designed to avoid war 
with nations with different social systems. Her policy, however, never rules out 
all types of struggles, either national liberation or ideological. 

(e) All this inevitably reveals the limit of detente. Its primary objective is 
nothing but the avoidance of an intercontinental nuclear war as well as conven- 
tional armed conflict that might escalate to such a war. Hence, detente does not 
keep big powers from staging political struggles for expanding influence or for 
preventing it. Neither does d&tente itself prevent military conflict in the areas 
where big powers have only limited strategic interest, as evident in the case of 
Angola. 

( f i The emergence of China as a nuclear power has made international rela- 
tions more complex than before and has contributed to the multipolarization of 
world politics. Against the background of the Sino-Soviet dispute, China never 
ceases to be defiant vis-a-vis her northern neighbor and always challenges any 
possible creation of a new international order under a Pax Russo-Americana. 

(g) Thus the realities of the world today are far removed from peace: powers, 
in the East and the West, build up their military capabilities while keeping their 
mutual distrust under the carpet, and make political accommodation only to the 
extent it is necessary. Detente or reduction of tension basically connotes both 
coexistence and struggle between East and West. Consequently the international 
community would have to live, for the foreseeable future, with the realities of a 
continuous cycle of tension and relaxation. However inevitable the parallel pres- 
ence of coexistence and struggle may be, if international relations are to turn 
more stable, the world may continue to need international efforts to maximize 
the coexistence relationship and to minimize the struggle factors through accel- 
erated development of arms control and other measures. 

B. Roles of collective security systems 

(a) Direct, armed collision has so far been successfully deterred both between 
the two nuclear superpowers and between collective security organizations, each 
with a US or Soviet deterrent, including nuclear capabilities, integrated as their 
respective basic security factor. The rest of the world, however, has suffered 
from countless military clashes since the end of World War II. 

(b) The collective security system among nations had primarily been military 
in Cold War days. As East-West confrontation was relaxed and interdependence 
gained momentum, the system has become the base for a wider spectrum of 
cooperative relations, not only military but also political and economic. 

(c) This does not spell an end to conflict of interests or to confrontation 
among nations. In the contemporary international community where the UN 
peacekeeping function falls short of an effective means, collective security sys- 
tems under regional arrangements still remain an appropriate option. 

C. Contemporary implication of military power 

(a) In the politico-military context outlined abf>ve. a kind of stability exists 
among the major nations today. To uphold this stability, however, the US and 
the Soviet Union have to keep their nuclear capabilities invulnerable while 
others maintain a military potential based on credible conventional arms. It 
might sound paradoxical that a strong military power is essential for the mainte- 
nance of peace ; it might not be so, however, if one identifies militarv power with 
the strength to deter war. This is the basic characteristic of military power in 
the nuclear age. 

(b) To avoid wars of any kind, a chain of nations should have no single feeble 
link which might provoke a military challenge: only an international system 
whose every link is strong and enduring can survive any test it faces. An appro- 
priate defense posture, coupled with diplomatic efforts, is the first step to 



67 



43 

strengthen the links of the chain of nations and to make peace strategy viable- 
Such a defense posture depends, first of all, on a collective security system based 
on common will and mutual responsibility. 

Secondly, it implies that every member nation of the system must have a strong 
will and capability to defend itself by itself. The maintenance and improvement 
of such a posture over a long period is the prerequisite of regional stability and 
peace. 

(c) Even if a war should break out, the major powers will most likely try to. 
avoid a nuclear exchange or a large scale military conflict; thus it is quite pos-" 
sible that the actual employment of their military means will be limited to a 
significantly lower level than what their inherent military might represents. 
This explains why even a nonnuclear military power can be useful for the de- 
fense of small and medium nations. 

2. STRATEGIC ENVIRONMENT OF JAPAN 

A. Most Asian nations have built-in domestic problems which, coupled with 
regional multiplicity, contribute to an ever present instability. To make the mat- 
ter more complex, China and the Soviet Union almost annually step up their 
positive approaches to these nations ; nowhere in the world does the Sino-Soviet 
rivalry seem to be so overt and intensive. The United States, on the other hand, 
plays the role of a counter-weight to the communist rivalry by expressing her 
concern in terms of a visible presence in the region. 

B. Northeast Asia is the area where the vital strategic interests of the United 
States, the Soviet Union and China converge. It is also one of the areas where 
a number of bilateral security systems function effectively, more or less. In 
sharp contrast to the European environment, the area is laced with confronta- 
tions and rivalries making it one of the most unstable regions in the world. A 
large scale armed conflict, however, is deterred at the moment by the tacit efforts 
of the United States, the Soviet Union and China. 

C. On the other hand, the United States and the Soviet Union maintain in 
this area frontal deployments of their armed forces, second in scale only to those 
of the European front. China and the Soviet Union have contributed since the 
late 1960's to a continued military tension along their land border where troop 
concentrations are obvious on both sides. 

D. The Soviet military has deployed in this region a sizable military force 
with a variety of combat capabilities which seems to have been substantially 
augmented in quality and quantity in accent years. In particular, its Pacific 
Fleet has acquired the status of a full-fledged Blue Water navy. 

E. China possesses a substantial military power with, as its mainstay, an 
army with the largest manpower in the world and some nuclear capability. She 
seems to be now focusing her efforts on the modernization of her military 
capability. 

F. The United States has gradually streamlined and reduced her military 
presence in this region, but she still deploys an infantry and a marine division 
in the Korean Peninsula and Okinawa respectively while her 7th Fleet and the 
5th Air Force maintain high mobile strike capabilities. 

G. In the Korean Peninsula, the confrontation continues between the north 
and the south with each side deploying more than a total one million regular 
troops in highest combat ready status. The area thus is one of the highest threat 
areas in the world in terms of military tension. A military contingency, however, 
still remains a remote likelihood mainly due to the continued military equilib- 
rium supported by the US military presence in Korea. 

H. Military situation in Japan's periphery: Chart 1 and 2 show the general 
trend of the military disposition around Japan and the deployment of forces in 
her periphery. 

Chapter II. Defense Policies of Japan 

1. BASIS OF DEFENSE POLICIES 

A. Fundamental implication of defense capability 

(a) A nation possesses its own defense capability as a demonstration of its 
people's will and responsibility to defend their freedom, independence and secur- 
ity, and to uphold peace, progress and prosperity. In Japan's case, such a capa- 
bility must be strictly for purely defensive purposes in accordance with the 
stipulation of article 9 of the Constitution. 



68 



44 

(b) With respect to nuclear arms, the three non-nuclear principles will be 
maintained and. against a nuclear threat, Japan will depend on the credibility 
of the American nuclear deterrent. If Japan should take a nuclear option even for 
a purely defensive purpose, her actual possession of nuclear arms will create 
serious suspicion and fear on the part of other nations. So long as Japan stands 
on this premise, she should feel no need to go nuclear, from not only the military 
but also the political viewpoints. 

(c) With this as the basic characteristic, Japan's defense capability should 
be ready to deal with a contingency by denying others easy armed aggression. 
This defense capability, together with the United States-Japan security system, 
must form a defense posture that leaves no operational deficiency. And under this 
system, the capability must be one which can function effectively in preventing 
an aggression before it is actually launched. 

id) The implication of possessing such a defense capability lies not so much 
in fighting a contingency as in functioning for the maintenance of i>eace. The 
capability, coupled with the United States- Japan security system, substantially 
contributes to a stable equilibrium of international relations in Asia. From this 
point of view, our defense capability should be of a size appropriate for such an 
implication and a contribution : it also must be of a nature that directly serves 
the public in helping and cooperating with them in peacetime. 

B. United States-Japan security system 

i a ) The system is generally understood to play the role of preventing aggres- 
sion against Japan from actually taking place, and of limiting the scale of an 
invasion, should it ever be undertaken. 

tb) The system is also instrumental in providing the US forces with facilities 
and areas for their use, which in turn make their presence tenable. An integral 
part of the basic framework of international relations in Asia, the system thus 
contributes to the stability of the world and the maintenance of peace. Finally, 
but not the least importantly, it. is the. indispensable base of the wider spectrum 
of friendly United States^Japanese relations. 

2. THE CONCEPT OF BASIC STANDING FORCE 

A. Procedural background 

The concept has been adopted by the Defense Agency in planning the follow-on 
of the Fourth Five-Year Defense Buildup Program (fiscal year 1972-76). It is 
expected to make the buildup program more concrete, practical, rationale and 
meaningful than it has ever been. In other words, the concept represents a form 
of thinking fed into the policy-drafting process in the Agency, and hence will be 
an input into a further review as to its practicability before it will be submitted 
to the Defense Council for a. final decision. 

H. International environment 

The concept presupposes a continued, effective maintenance of the United 
States-Japan security system, and in addition assumes : 

(a) that the United States and the Soviet I'nion will try to avoid an inter- 
continental nuclear war and an armed conflict which might lead to their full- 
scale involvement. 

tb) that the Soviet Union will continue to face many European problems — a 
XATO- Warsaw Pact confrontation and the control of East European nations, 
among other matters. 

(c) that. Sino-Soviet relations, if improved partially, will most unlikely lead 
to an end of confrontation, 

id) that in Siho-U.S. relations, a further adjustment will continue on a re- 
ciprocal basis, and 

(e) that the status quo, more or less, will be maintained in the Korean Pe- 
ninsula where a minor incident would not escalate to a large-scale conflict. 

This series of assumptions makes it almost unthinkable that a large-scale 
military agression might be launched against Japan but does not rule out the 
possibility of a spin-off from an armed conflict in Japan's peripheral areas and 
of other small-scale military invasions. 

C. Conrrptual implications 

(a) Against the background of the international environment assumed above, 
our defense capability could be identified with a defense power in peacetime. Its 



69 



45 

primary goal is not so much an ability to deal with a specific, imminent threat as 
a basic posture streamlined as a whole with no gross deficiency and well-balanced 
so far as its integral elements are concerned. Such a defense capability by nature 
spells that : 

(i) Every integral element of defense should have no serious deficiency so 
that the capability as a whole would be sufficient to take minimum, necessary 
steps in dealing with possible aggression staged by any of the conventional means, 

(ii) In terms of operational function, all the elements must be built up and 
organized by taking into account the characteristics of Japan's peculiar terrain 
and other local conditions. This is indispensable for an organized defensive reac- 
tion to an aggression, from its very outset, should it break out in either Japan's 
territorv or her peripheral air or sea space. The organization needs both a bal- 
ances between, and an organic integration of, combat and, logistic elements, if 
they are to operate as an effective, comprehensive defense power against the 
aggression. . . 

(iii) In peaeetume, the defense capability should undertake meticulously 
planned training and education. Further, to be always ready for rescue-relief op- 
eration in case of a large-scale natural disaster* the required units with necessary 
facilities and equipment ought to be prepositioned in such a manner as to leave 
no serious geographical gap. 

(b) In terms of operational capability, the basic standing force must main- 
tain the following posture : 

(i) For a quick and flexible response to changes in situations, a higher priority 
should be given to operational readiness of air and strait surveillance as well as 
other intelligence activities than to other elements of the defense capability. 

(ii) The basic standing force must maintain an operational posture ready to 
deal quickly and appropriately with indirect aggression, violations of territorial 
air and other types of illegal military acts. 

(iii) A most conceivable small-scale aggression, if any, may well turn out to 
be a near-surprise attack. This spells a need for a quick response posture which 
in turn depends on the sufficiency of manpower and equipment within a necessary 
limit. 

(iv) In upgrading various force functions and equipment, it should be taken 
into account that the United States- Japan security system would function effec- 
tively: that in turn means that smooth operational coordination with the U.S. 
forceps will be of critical importance. 

(v) The force must be a basis for a smooth expansion and reinforcement to a 
necessary level, if and when a political decision should be made to that effect in 
response to changes in the international situation. 

D. In short, our defense capability can be best described as the basic standing 
force — "basic" in that it is similar to a meaningful basic minimum force com- 
monly accepted as something which any independent nation will need, and "stand- 
ing" in that Japan in particular needs it at all times, given the contemporary 
domestic climate and international environment. The concept, however, will be 
subject to a review, should substantial changes emerge in the presupposed inter- 
national situation. ' ' 

E. Primary emphasis 

A major emphasis is placed on qualitative improvement rather than on quanti- 
tative expansion in the planned buildup of our defense capability under the 
concept of the basic standing force. By qualitative improvement, it is not meant 
only to upgrade the performance factors of tanks, aircraft, ship and other major 
equipment but rather to enhance the defense capability as a whole with combat 
and logistic elements well balanced functionally in the context of an overall 
national security posture. 

Chapter III. The Public and Self -Defense Forces 

1. CIVILIAN C0NTKOL 

One factor differentiates the contemporary self-defense forces from the mili- 
tary under the old constitution ; it is the fact that they are integrated into a 
civilian control system that exists in various forms at every planning and policy- 
making stage from the Diet, the cabinet, the Defense Council to the Defense 
Agency. The system, if it is to remain valid and viable, should be supported by 
politico-administrative efforts public concern as Well as by the understanding of 
the men in the forces. 



70 



46 



2. "COMMITTEE TO THINK ABOUT DEFENSE" 

The 11-member committee was set up to give a conceptual input of public 
opinion into defense planning for the period that follows the Fourth Defense 
Buildup Program. The members studied and discussed, among other things, the 
need for Japan to possess her own defense capability, the implication of the 
United States-Japan security system and its role. The views and suggestions 
produced in the committee have contributed substantially to the conceptual work 
of the basic standing force. 

3. PUBLIC UNDERSTANDING AND CONCERN 

Public concern in defense affairs has gradually grown greater as evident in a 
recent public opinion poll which showed that 79 percent of the polled recognized 
the need for having the self-defense forces. Close contacts are also developing 
between the public in general and the men in the forces, while a minority of the 
people still maintains a negative attitude toward the forces, producing a detri- 
mental effect upon the morale of the men in service. 

4. DEFENSE FACILITIES AND COMMUNITY 

For an overall defense posture, it is critically important that a harmonious 
relationship should exist between defense facilities and the surrounding com- 
munity. On one hand, the facilities must function effectively ; on the other, the 
function should not disturb the community excessively. For this purpose, a new 
law was put into effect in 1974 for the improvement of the living environment 
around defense facilities. The Agency has since taken positive steps to reduce 
the noise levels of aircraft and to prevent other forms of possible public nuisance. 

5. RESCUE-RELIEF AND OTHER COMMUNITY ACTIVITIES 

In addition to their inherent mission, the self-defense forces must contribute to 
the stabilization of national life by making best use of their organization, equip- 
ment and capabilities. They must have undertaken rescue-relief operations, dis- 
posal of unexploded bombers and other community activities, including civil 
engineering projects. The rescue-relief operations have increased both in scope- 
and. scale as illustrated in chart 3. An exercise has also been conducted in prep- 
aration for a possible major earthquake. 

Chapter IV, SDF and Their Major Activities 

1. ORGANIZATION AND AUTHORIZED MANPOWER 
2. OUTCOME OF THE FOURTH DBP 

The five year buildup program for fiscal year 1972-76 is about to end with a 
substantial proportion of the planned acquisition of major equipment left un- 
accomplished, mainly due to extremely high procurement cost. 

3. NEW UNITS AND NEW EQUIPMENT 

Newly organized or commissioned units and equipment include the 1st Tank 
Brigade, the 7th Antiaircraft Artillery Group, DDG Tachikaze equipped with 
SAMs, submarine Takashio, and F4EJ squadron and a C-l Squadron, among 
others. 

4. SCRAMBLES 

The Air Self-Defense Force is under alert around the clock against possible 
violations of Japan's territorial air. In September 1975, for instance, a Soviet 
plane did violate the territorial air forcing the ASDF to scramble. Frequency of 
scrambles stands at about 320 times a year (table 1). 

5. RESTRICTED TRAINING AIR SPACE 

Air space for ASDF training has been strictly restricted since 1971. This 
creates considerable difficulty in the training programs of jet planes. A similar 
difficulty exists in finding maneuver grounds for the GSDF and training waters 
for the MSDF. 

6. UPGRADING OF EDUCATION 

A Defense Medical College was set up to meet an acute shortage of medical 
officers while the Defense Academy has added a new faculty of Humanities and 
Social Science. 



71 



47 



7. INTERNAL OPINION SURVEY 

A recent survey conducted by the GSDF shows that 74 percent of the men feel 
their daily duties are worthwhile, that many list, as an ideal mode of living, 
"life with' time for individual hobbies" and that many others call for more in- 
tensive daily training. 

8. NEW POLICIES FOR SDF PERSONNEL 

A new system was initiated to recruit high school graduates of high caliber 
and train them for quicker promotion to the EM grade; the Agency also improved 
pay and accommodations for those living in barracks, and started in fiscal year 
1974 to accept women in both the MSDF and the A SDF. 

9. R. & D. AND DOMESTIC PRODUCTION 

Domestic arms production is a desirable option for acquiring equipment that 
is exactly suitable for Japan's terrain and other specific requirements as well 
.as maintaining a technological potential and streamlining logistic support. 
However, there can be a case in which domestic technology and cost-effectiveness 
-could be inferior to equipment purchased overseas. Procurement decisions have 
thus been made on a case-by-case basis. Domestic arms production and R. & D. 
have to be undertaken in an extremely difficult condition, cost-wise and man- 
power-wise. The problems that need further scrutiny include, therefore, a selec- 
tion of items with predetermined priorities, strict evaluation and properly 
planned home production. 

10. DEFENSE EXPENDITURES t THEIR TRENDS 

During the Fourth DBP, the defense-expenditure/appropriated-budget ratio 
decreased annually as shown in Chart 4 ; the average increase of the expenditure 
stands at 17.7 percent against 20.9 percent of the appropriated budget. On the 
other hand, the manpower cost has risen while the proportion allocated to ma- 
terial cost has dropped as shown in chart 5. The absolute amount of Japan's 
defense expenditure can be ranked 10th in the world ; but this is somewhat mis- 
leading since Japan belongs to a world group ranked at the bottom if the ex- 
penditure is measured in relation to either GNP, per-capita income or the ap- 
propriated budget. 

FIG. 1. — TREND OF FORCES AROUND JAPAN (APPROXIMATE) 



Division Naval forces Air forces 



U.S.S.R. in the Far East: 

1965 _ 8 (17) 70 1,430 

1970 20 (22) 100 1,870 

1975... 30 (30) 2,000 

■China: 

1965 225 (115) 21 2,800 

1970....; * 245 (118) 21 3,300 

1975 280 (142) 35 4,400 

tlorth Korea: 

1965 33 (18) 1.5 500 

1970 37 (22) 1.4 580 

1975 41 (24) 4.4 590 

•Republic of Korea: 

1965 57 (29) 5.7 

1970 .... 60 (30) 7.0 200 

1975 58 (24) 7.8 220 

U.S. Forces in the Far East: 

1965 8.7 (3) 90 920 

1970 9.6 (3) 110 740 

1975 6.6 (2) 60 500 

Japan: 

1965 15.2 (13) 11.2 720 

1970 15.8 (13) 13.9 590 

1975 15.5 (13) 16.8 610 



1. The figures for ground forces (10,000 persons) and air forces (combat aircraft) are quoted mainly from the Military 
Balance published in the corresponding year. 

2. The figures for naval forces (10,000 tons) are quoted mainly from the Jane's Fighting Ships published in the corre- 
sponding year. 

3. The figures for Chinese divisions do not include artillery, and railway construction engineer divisions. 

4. Naval force of the U.S. forces in the Far East is the 7th Fleet Air forces include carrier borne elements of the 7th 
Sleet 

5. U.S. forces in the Far East are in Japan, the Republic of Korea, Taiwan, and Philippines. 

6. The figures for Japan indicate actual strength. 



72 



48 



USSR h» I lie ! 


ar Dust 


j| j| ^ mti i n 1 N« |1 




■JBL— 






120 




- ■ f 2 


000 







(Mi i na 

Hi 


Nor til Kore;i 
590 






IfcpubJ i e of Korea ' 




ttiW 56 

7.8 > 




-~«*r* 220 

Marine Corps 2 


U..S.K. in R.O.K. 
r 4. 2 (1 div.) 

— ■* (>{) 






I'lli 


1 i iif.-i 
A 


| ,I - S ' 1 ''- 


Mi 


Jl'li i I i j » | » i ncs 




5.2 












50 




U.S. P. iii Japan 



200 

Mil l ine Corps 2.4 



^«er« 220 

Ma i i tie Corps ") . 5 



U.S. P. in 

Tu i van 
• 0.25 



The 7 tli Fleet 
60 



150 

(Carrier borne) 



(Note) 



I. Aircraft is "combat Hire raft" from Military Balance, it 
comprises bomber, fighter-bomber, strike, interceptor, 
necoiuiaissiuice , etc.; it Joes not include helicopters* 



73 



49 



Figure 2. — Deployment and basing around Japan. 



the nurnlicr of cases 



800 600 400 'COO 



i — T 



FX 



1970 



1971 



1972 



1973 



1974 



persons (total) 



(10 thousands) 
2 • 4 6 8 10 12 



[J GSJJL- 

□ HStiV 

□ AS 1)1' 



74 



50 



Figure 3. — Relief for disastered people. 



(<) 

1 .8- 
I .7- 
I .<">. 

I .5- 
I ,4. 
I • 3. 
I .2. 
I . I- 
1 .0. 

().«). 
0.8. 
0.7- 



(■;'■) 

J'J.OO - 
1 3.00 - 
12.00 
] ! .00 
10.00 - 
9.00 
8.00 • 

7.oo 

ft. 00 
•5.00 



Do reuse n^K^^:' , l•/o^^ 



L." 



O.VL 



1.5-. 



1.0 



l)«?!Vn.s<i HikI/^cI/CciicjuI /U'rconnl. IltfifgnL 



J 3. 



U 1. 




10.00 



5.00 



{VS.) 1955 I960 1965 1970 1971 1972 1973 1974 1975 1976 



75 



51 



Figure 4.— Trend of defense budget. 

CJ mprovrmcn t of focal "SiTnaJ.ion \ 
A.ljmenL t.n Facilities ami Areas, J 
inn! U(?loc;tl inn / 



^rm-y. ami Hal-.^ 



nud M.-ii i>t.. 



Ft 1972 



1«J7J 



^ Others (ft. ami 




10 'JO 30 '10 



f)0 ()0 



80 VO J 00 ('/•) 



(Note) I. l'inf.Micmmji. includes Vea|mus owl Vehicles, Aircrnfl unci Ships, 

2. 0|i«-i*alii»ii and Main (.enaiice includes hiving cosl, Clothing, FiieJ , 
Maiui.(.'iuujce iuuJ Repair. * • 



Figube 5. — Change of composition of defense budget under the fourth 5-year 

defense plan. 

The number of times of scramble (Fiscal year 1970-74) : 
Fiscal year : Number of times- 

1970 -I 370 

1971 345 

1972 306 

1973 257 

1974 - 323 

Total 1, 601 

Average "320 

* About 



4. DATA CONCERNING U.S. MILITARY PERSONNEL AND BASES IN 

JAPAN 

Graph I 



U.S. MILITARY POPULATION IN JAPM 
(in Thousands) 



250 



200 




Note. — Rise on graph in 1972 reflects the U.S. bases on Okinawa which became 
a part of the U.S. military community in Japan upon reversion. 

Source : Dept. of Defense. 

Graph II 

US FACILITY -HOLDINGS 



400C 



400 



300 - 



200 



ICC 




V. 15 WAY 1972 



o - 
J952 



1955 



I960 



1965 



1970 



1975 



111. 



Note. — Rise on graph in 1972 reflects the U.S. bases on Okinawa which became 
a part of the U.S. military community in Japan upon reversion. 

Source : Dept. of Defense. 

(53) 



(77) 



78 



54 



PERSONNEL STBEHGIHS 



U.S. MILITARY 



CIVIL SERVICE 



EMPLOYEES 



U.S. DEPENDENTS 
(MIL a CIV) 



ARMY 
NAVY 
MARINES 



4,462 
6,607 
23.915 



3,768 



43,220 



AIR FORCE 14,756 



TOTAL 



49.750 



3/76 



GRAND TOTAL 96,7 28 



Source : Dept of Defense. 



US fOBCES" ASSIGNBENT 



ASSIGNMENT 
V 



JAPAN' 



OKINAWA 
PREFECTURE 



100 
75- 

50- 

25- 

0%- 

25- 

50- 

75- 



MARINES 



23,915 



AIR FORCE 



14,756 



ARMY 



4,462 



22' 



78% 



42° 



58% 



31' 



I 



69% 



NAVY 



6,607 



TOTAL 



49,740 



64 c 



F 



I 

35% 



34% 



i I 



66% 



i/76. 



Source : Dept. of Defense. 



APPENDIX 2 



"IS Sn" } COMMITTEE PBINT 



POSTWAR SOUTHEAST ASIA 



A SEARCH FOR NEUTRALITY AND 
INDEPENDENCE 



A REPORT 

BY 

Senator Mike Mansfield 
Majority Leader, United States Senate 

REPORT NUMBER TWO 




SEPTEMBER 1976 



Printed for the use of the Committee on Foreign Relations 



U.S. GOVERNMENT PRINTING OFFICE 
WASHINGTON : 1976 



(79) 



80 



COMMITTEE ON FOREIGN RELATIONS 



JOHN 8PARKMAN, Alabama, Chairman 



MIKE MANSFIELD, Montana 
FRANK CHURCH, Idaho 
STUART SYMINGTON, Missouri 
CLAIBORNE PELL, Rhode Island 
GALE W. McGEE, Wyoming 
GEORGE S. McGOVERN, South Dakota 
HUBERT H. HUMPHREY, Minnesota 
DICK CLARK, Iowa 
JOSEPH R. BIDEN, Jr., Delaware 

Pat M. Holt, Chief of Staff 
Arthur M. Kuhl, Chief Clerk 



CLIFFORD P. CASE, New Jersey 
JACOB K. JAVITS, New York 
HUGH SCOTT, Pennsylvania 
JAMES B. PEARSON, Kansas 
CHARLES H. PERCY, Illinois 
ROBERT P. GRIFFIN, Michigan 



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81 



LETTER OF TRANSMITTAL 



August 31, 1976. 

Hon. John Sparkman, 

Chairman, Committee on Foreign Relations, 

U.S. Senate, Washington, D.C. 

Dear Mr. Chairman: With the Committee's permission, during 
the August recess I made an official trip to Thailand, Burma and 
Laos to study various aspects of United States relations with those 
countries and regional developments which bear on American policy 
questions. I also stopped in Hong Kong to obtain a briefing from the 
staff of the American Consulate General concerning the current situa- 
tion in the People's Republic of China and information about the 
international traffic in narcotics. Enroute to and returning from 
Southeast Asia, I also stopped briefly in Tokyo to receive up-to-date 
reports on recent political developments in Japan. 

I am hereby transmitting my report on the trip, in the form of a 
speech I made in the Senate on August 26. 

In Thailand I met with His Majesty King Phumiphon Adunyadet, 
Prime Minister Seni Pramot, Foreign Minister Phichai Rattakun and 
other officials of the foreign ministry. Ambassador Charles S. White- 
house provided me with a thorough briefing. 

From Bangkok, I flew in a small airplane, attached to the U.S. 
Embassy in Thailand, to Vientiane, Laos, the first U.S. aircraft al- 
lowed into Laos in more than a year. While in Laos, I had a discussion 
with Deputy Foreign Minister Khamphay Boupha, received a briefing 
from Mr. Thomas Corcoran, Charge d'Affaires of the U.S. Embassy, 
and his staff, and had an opportunity to meet informally with a 
number of foreign diplomats and other observers of the Laotian scene. 

I then travelled to Rangoon, Burma. President Ne Win was out of 
the country and, in his absence, I met with General San Yu, Secretary 
of the Council of State, and a number of other Burmese officials. 
Ambassador David L. Osborn and members of his staff were helpful 
in many ways during my stay in Burma. 

I wish to express my appreciation to United States officials at each 
of the posts I visited for the assistance they provided, to the Depart- 
ment of State for making my travel arrangements, to the Library of 
Congress for assembling background materials, and to Mr. Francis 
Valeo, Secretary of the Senate, and Mr. Norvill Jones, of the staff of 
the Committee on Foreign Relations, both of whom have accompanied 
me on a number of past missions, for their assistance in connection 
with the trip. 

Sincerely, 

Mike Mansfield. 



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POSTWAR SOUTHEAST ASIA— A SEARCH FOR NEUTRALITY 
AND INDEPENDENCE 



Speech by Senator Mike Mansfield in the United States 
Senate, August 26, 1976 

Mr. Mansfield. Mr. President, 1 year ago, on behalf of the Com- 
mittee on Foreign Relations, I visited three nations in Southeast 
Asia, Thailand, the Philippines, and Burma, to study regional and 
local developments after the ending of U.S. involvement in Indo- 
china. Upon my return, I reported to the committee that: 

Throughout Southeast Asia, nations are now making 
reassessments of their relationships. Nationalism and 
neutrality, mixed with a budding interest in regional co- 
operation, are the driving forces at work. 

I ask unanimous consent that pertinent portions of this report be 
printed in the Record following my remarks. 

The Acting President pro tempore. Without objection, it is so 
ordered. 

(See exhibit 1, p. 11.) 

Mr. Mansfield. During the recent congressional recess, I returned 
to Southeast Asia to make an up-to-date reappraisal of the situation 
there, visiting Thailand, Burma, and Laos. A confidential report has 
already been submitted to the President as a result of that trip. 
This is my report to the Senate. 

Winds of change still sweep the area, continuing to move the 
region toward cohesion and an easing of tensions. The U.S. role in 
this movement is limited and must remain so. It is not for this Nation, 
nor is it possible for this Nation to tell the nations of Southeast Asia 
what is in their interest. If we have learned anything from our sad 
experience in Indochina, it is that the future of Southeast Asia is for 
the nations of the area to decide and without outside interference . 

The Philippines, Thailand, Malaysia, Singapore, and Indonesia, 
through the Association of Southeast Asian Nations, ASEAN, have 
taken small but positive steps toward regional cooperation. In Febru- 
ary, the heads of state of the five ASEAN members met at their first 
summit conference to produce a treaty of amity and cooperation and 
other agreements looking toward closer collaboration on problems of 
common concern. There remained, however, an uneasy uncertainty 
about what course Vietnam, now a powerful, unified nation of 40 
million people, would take in regional affairs. 

Twenty-two years after the Geneva cease-fire agreement which 
temporarily divided the nation, the two parts of Vietnam have become 
one. After three decades of isolation and civil war, Vietnam has 
entered the regional political scene. The ASEAN States and Vietnam 
have launched a major program of detente, which has already produced 

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2 

an atmosphere of regional friendship. During July, Vietnam's Deputy 
Foreign Minister Phan Hien made a goodwill visit to several of the 
ASEAN countries as well as to Burma and Laos. The five ASEAN 
countries have established diplomatic relations with Vietnam. All 
signs indicate that Vietnam has set out to prove to its neighbors and 
the world that it is determined to pursue an independent course, free 
from domination by either the Soviet Union or China. 

These important steps toward regional amity should be welcomed 
by the United States. A regional organization composed of the 
ASEAN nations, the states of Indochina, and Burma, dedicated to 
peaceful intercourse, would be a significant force in maintaining 
stability and promoting economic progress in this volatile area. Thai 
officials assured me of their strong support for this concept. While 
endorsing a regionwide organization in principle, Burma has lingering 
historical suspicions. 

I will describe briefly some current aspects of U.S. relations with 
Thailand, Burma, and Laos and then discuss the drug situation, a 
problem of particular concern to this Nation, as it involves Burma 
and Thailand. 

Thailand 

In Thailand, Prime Minister Seni Pramot presides over a shaky 
parliamentary government. Although the ruling coalition is composed 
of only 4 parties, compared with 17 in the previous government led 
by his brother, Kukrit Pramot, there is serious dissension with the 
coalition. In addition, there is the ever-present threat of a military 
coup. While I was in the country, a crisis arose as a result of the sur- 
reptitious return to Bangkok from Taiwan of the former military 
strongman, Field Marshal Praphas Charasathien, who was exiled 
when the military government was ousted in 1973. It was widely as- 
sumed that his return was designed to stimulate overthrow of the 
civilian government by the military. The government's handling of the 
affair aroused strong passions on both the left and the right. Although 
Praphas was -forced to leave the country, the incident has probably 
given encouragement both to opposition elements within the govern- 
ment and to antidemocratic elements in the Military Establishment. 

It is said that the military, much of which is opposed to Thailand's 
commitment to regional detente with Vietnam, Laos, and Cambodia, 
is convinced that the country's experiment with democracy will fail. 
Although it is making a valiant attempt to survive, the future of 
Thailand's fledgling democratic system is less than assured. On the 
other hand, prospects for survival of parliamentary government are 
aided significantly by a reasonably bright economic picture and vivid 
public memories of the oppressive tactics of previous military govern- 
ments. Insurgencies in the North and Northeast, and to a lesser extent 
in the South, continue but the problem appears little changed from 
las t year. And the picture is not likely to improve as long as there is 
no firm d edication by the^Bangkok Gove rnment to\bringing about 
k real economic /progress in neglected regions. 

The withdrawal in July of the last regular U.S. military forces, 
leaving only a 250-man advisory unit, was a significant factor in 
creating favorable conditions for the establishment 2 weeks later of 
diplomatic relations between Thailand and Vietnam. Americans should 



85 



3 

not interpret the Thai demand for the withdrawal of U.S. forces as an 
unfriendly gesture. It should be seen for what it was, an inevitable 
adjustment to the new realities which both countries face in South- 
east Asia. 

Under the withdrawal agreement the United States will have cer- 
tain aircraft transit rights at the Takli air base. The abuse of this 
privilege should be scrupulously avoided, lest it exacerbate the tenuous 
political situation in Thailand. Both military and economic assistance 
to Thailand continue, although nonconcessional economic aid, other 
than that for population contol and antidrug programs, will terminate 
next year. Military grant aid will end in 1977 also as a result of the 
general phaseout voted by the Congress. Consistent with Thailand's 
desire to stand on its own two feet, U.S. bilateral aid programs for 
population and antidrug activities should be terminated also if the 
responsibility for programs in these fields can be shifted to the United 
Nations. 

The current Thai Government favors continuation of the SEATO 
treaty relationship with the United States. Drawn up following the 
1954 Geneva Conference on Indochina as a device to stop the spread 
of communism in Southeast Asia, the SEATO treaty is no longer a 
viable multilateral security agreement. It has practical application 
only to Thailand. Although I strongly approve of Thailand's desire to 
maintain close ties to the United States, I do not believe that trying 
to breathe life into the SEATO treaty, a relic of the errors of past 
policy, is in the best interests of either country. Sound bilateral trade 
and economic relations are far more important to Thai-United States 
friendship than a lifeless scrap of paper. Undue emphasis on military 
matters would be an anachronism, inconsistent with the current 
interests of both countries. It is, however, important that America 
continue to demonstrate its desire for close, friendly relations with 
Thailand in ways that will promote regional cooperation and heal the 
wounds left by the recent war. 

Burma 

The situation in Burma has changed little since last year. Burma 
continues rigorously to pursue a nonaligned course, keeping its distance 
from all of the major powers. Seven years ago in a report to the 
Senate, I wrote : 

The Burmese government continues to go its own way as it 
has for many years. It is neither overawed by the proximity 
of powerful neighbors nor overimpressed by the virtues of 
rapid development through large infusions of foreign aid. 
Burma's primary concern is the retention of its national and 
cultural identity and the development of an economic system 
preponderantly by its own efforts and along its own lines. 

That analysis continues to be valid. 

In July, a coup plot against President Ne Win's government, insti- 
gated by a number of low-ranking, but well-connected, army officers, 
was discovered. Although the attempt may signify eroding confidence 
in Ne Win's leadership within the army, it did not deter the President 
from leaving for Europe in mid-August for medical treatment. On 



86 



. 4 

the positive side, there are reliable reports that the event stimulated 
the government to take more aggressive action to cure the ills of 
Burma's stagnant and inefficient economy. A World Bank Consulta- 
tive Group is being formed to aid in stimulating economic growth but, 
thus far, the United States has refused to join, seeking assurances of 
economic changes in advance of participation. 

Insurgencies continue in Burma's remote mountainous regions but, 
according to observers, the government has made some progress 
within the last year in controlling the problem. Although the country's 
economy is notoriously mismanaged, it is a country rich in assets, 
both in natural resources and people. "No one dies of starvation in 
Burma," one top official put it. That says a great deal about the 
situation. 

The United States owns some $12 million in Burmese currencies 
which are wasting away through inflation. My visit to Burma a year 
ago came several weeks after a devastating earthquake had seriously 
damaged or destroyed many Buddhist temples in historic Pagan. It 
required 5 months of prodding within the Government in Washington 
to get an Embassy request approved for a token gift of $10,000 of 
these currencies to aid in the restoration work at Pagan, approval 
that came long after all major nations had made even more substantial 
contributions. An Embassy request is now pending in the State 
Department for use of a modest amount of this U.S.-owned local 
currency to make needed improvements in Embassy staff apartments. 
I hope that not only will the Embassy's request be approved but also 
that a study be made of other appropriate ways to make effective 
use of the U.S.-owned holdings. 

Laos 

With the approval of the Government of Laos, I flew from Bangkok 
to Vientiane in a small aircraft attached to the U.S. Embassy in 
Thailand, the first U.S. aircraft of any type allowed into Laos in more 
than a year. I view the Laotian Governments' approval of my flight as 
a gesture of good will toward the United States. 

The new government has taken steps to improve relations with 
Thailand, although deep suspicions remain from the period when 
Thailand was used as a base for military operations against Laos. 
Agreement in principle was reached early this month to open several 
border crossings on the Mekong to facilitate trade between the two 
countries. 

In the course of a long conversation with me, the Acting Foreign 
Minister, Khamphay Boupha, repeatedly made allegations that the 
United States was supporting anti-Lao elements in Thailand. I 
assured him that, according to the best information available to me, 
the United States was not engaged in any operations in Thailand 
directed against Laos. 

The Lao Government seeks assistance from all sources, to repair 
the damage inflicted on its people and resources during many years of 
civil and international war. Acting Foreign Minister Khamphay 
told me that 500,000 Loatians were forced to leave their homes because 
of the war — a United Nations representative in Vientiane said that 
the number was as high as 700,000 — and that 100,000 were killed 



87 



5 

and tens of thousands wounded, a terrible toll for a country of only 
3 million people. Significant United Nations programs are underway 
to aid refugees and restore agricultural productivity. 

Minister Khamphay assured me that his government "wants to 
maintain good relations with the United States on the basis of mutual 
respect for each other's independence, sovereignty, and territorial 
integrity." The Laotian Government, he said, had two objectives for 
its relations with the United States: First, to bring a halt to any 
support by the United States for what he termed the "reactionary 
traitors" working against Laos; and second, to obtain assistance for 
healing the wounds of the war. 

As I noted above, on the basis of official information, I was able to 
assure the Laotian Deputy Foreign Minister that we were no longer 
involved in the internal affairs of Laos. It would be my hope that 
such would continue to the case. There would be no point at this time 
in the United States giving any support, directly or indirectly, to anti- 
Loatian elements inside or outside of that country, under any cir- 
cumstances. As to foreign aid, I believe that, at an appropriate time, 
consideration should be given to providing relief aid through the United 
Nations or other international auspices, not as war reparations, but as 
a decent gesture to a poor country in a great need through little fault 
of its own. 

One problem of concern to many Americans very much on my mind 
in traveling to Laos, was to seek cooperation in determining the fate 
of some 300 U.S. servicemen missing in action from aircraft which 
went down in Laos. When I raised this matter, Minister Khamphay 
said to me: 

The Lao have a long tradition of adhering to humanitarian 
principles. . . . The government has ordered the people 
throughout the country to look for crash sites and if the 
people find any they are to report to us and the information 
will be passed to the United States. 

In a speech on Pacific policy on December 7, 1975, President Ford 
said that U.S. policy toward the new regimes in Indochina will be 
"determined by their conduct toward us. We are prepared to recipro- 
cate gestures of goodwill — particularly the return of remains of 
Americans killed or missing in action or information about them." 
I hope that this cooperative gesture by the Laotian Government will 
produce helpful information. It might well be matched by a gesture 
on our part. 

In this connection, it seems to me that the United States should 
send an ambassador to Laos, a country with which we still maintain 
formal diplomatic relations. The nomination of Galen Stone 1>o be 
Ambassador to Laos was confirmed by the Senate nearly 15 months 
ago but he has yet to be sent to take up his post. Either he or a re^ 
placement should be sent to Vientiane. The present course smacks of 
a petty petulence. 

NARCOTICS 

The United States is making a major effort in Thailand and Burma, 
at a cost of several millions of dollars each year, to lessen the flow of 
narcotics to the United States from the Golden Triangle. The United 
Nations also operate^ antinarcotics programs in both countries. 



88 



6 

After an investment of $8.5 million in equipment and advisers, plus 
the cost of an additional $2.6 million annually for regional U.S. Drug 
Enforcement Administration operations, there is little to show in 
Thailand for the American investment. 

Although the growing of opium in Thailand has been illegal since 
1959, the law is not enforced. According to experienced observers, a 
more fundamental problem is that a revolving door system under 
which arrested drug traffickers are quickly released is still the rule. 
Hong Kong authorities, who must cope with the flow of drugs from 
the Bangkok connection, are making significant progress in local 
antidrug programs but are critical of the Thai Government's laxity in 
dealing with drug traffickers. The authorities of other nations are also 
highly critical of the failure of the Thai Government to police its side 
of the border and of the corruption reputed to exist in the Thai police 
system. 

To be sure, the Thai Government has to deal with many problems. 
Stopping the Bangkok drug traffic, however, is a major headache. 
Until there is a much greater commitment to deal with the problem, 
putting more millions of American money into buying helicopters, 
radios, jeeps, and other fancy equipment for the Thai antinarcotics 
police will not have the desired effect. 

According to U.S. officials, Burma is making effective use of 12 
helicopters the United States has provided within the last year for 
antinarcotics operations. Six more are yet to be delivered. The Bur- 
mese Army has begun a program of physically destroying opium poppy 
fields, which, according to estimates, has reduced this year's potential 
crop from 470 tons to 343 tons, compared with an estimated 440 tons, 
produced in Burma last year. It is said, optimistically perhaps, that 
Burma's opium production can be virtually efiminated within 3 or 4 
years, if an effective herbicide eradication program is initiated and 
crop substitution schemes now being planned have appeal to the 
traditional opium growers. Efforts have been made to establish a U.S. 
Drug Enforcement Agency presence in Burma, a move resisted in 
Burma. In my judgment, the arguments against bringing DEA 
personnel into Burma are fully tenable and there is no reasonable justi- 
fication for such an expansion of the bureaucracy. 

Laos is not a factor in the external opium trade, according to most 
experts. The current Lao Government is taking drastic measures to 
cure drug addicts, sending them to an island in the middle of the 
Mekong for intensive treatment. As to China, all U.S. officials within 
the area agree that it is not a source of narcotics for the outside world, 
producing only as much opium as is required for internal medical 
needs. 

In my report last year, I expressed concern over involvement by 
U.S. narcotics operatives in police actions abroad. As a result, Con- 
gress adopted a proposal which prohibits any U.S. personnel abroad 
from participating in any foreign police arrest actions in connection 
with narcotics operations. The Drug Enforcement Administration has 
issued guidelines for implementation of this provision and I have been 
assured by Mr. Peter Bensinger, the DEA Administrator, that both 
the letter and the spirit of the law will be strictly enforced. 

In view of the fact that the drug problem is international in scope, 
I also recommended last year that the United States channel assistance 



89 



7 

to other countries for antinarcotics efforts through the United Na- 
tions. Congress has directed the President to make a study of how to 
achieve this objective. In both Thailand and Burma, for example, the 
United Nations already conducts crop substitution and other anti- 
drug programs. Burma, intent on maintaining its distance from all 
major powers, has indicated keen interest in obtaining through the 
United Nations assistance of the kind we now provide on a bilateral 
basis. I believe that leaders of the Thai Government would also be 
more comfortable if the United Nations^took the lead from the United 
States in this field. 

The Committee on Foreign Relations should make a thorough 
study of the foreign operations of the antinarcotics program. It is an 
expensive program, costing $37.5 million for direct aid alone in the 
last fiscal year. It is also an administrative nightmare involving the 
operations abroad of at least five Departments and agencies — the 
DEA, AID, CIA, the Department of Agriculture, and the Depart- 
ment of State, which, through our ambassadors, is supposed to be in 
charge of the entire operation. Pending submission of the Presidential 
report on shifting emphasis to the United Nations or regional pro- 
grams, the committee should make a careful study of the manage- 
ment and cost effectiveness of all current drug operations abroad. 

NONALIGNED CONFERENCE 

While I was in Southeast Asia, an event of significance took place in 
Sri Lanka, the Fifth Conference of the Non- Aligned Nations. The dele- 
gates at Colombo represented two-thirds of the nations of the world 
and one- third of its inhabitants, a three-fold increase from the 28 
nations represented at the founding meeting at Bandung two decades 
ago. Much of the rhetoric that came out of the conference hall in 
Colombo was not very palatable to us. Nevertheless, it is in our 
national interest to pay close attention to the Third World, to what 
the leaders of these countries think and seek. The United States is 
rapidly becoming a have-not Nation in regard to basic resources on 
which we and other industrial nations are dependent. The Third World 
straddles a good share of the world's supply of these resources and 
can no longer be ignored. 

I returned from my visit to Southeast Asia with a firm conviction 
that, in general, developments in the region are moving in the right 
direction, both for the nations concerned and for the United States. 
The Southeast Asian countries appear determined to pursue an inde- 
pendent path, free of outside domination by any power. There are 
encouraging signs that, on a parallel tract, most also seek to further 
regional understanding, or, at a minimum, to join hands in preventing 
undue interference from outsiders. 

Vietnam, contrary to many predictions, is demonstrating a desire to 
live in peace with its neighbors. It has now applied for membership in 
the United Nations. I hope that the United States will not again veto 
its application. Our relations with the nations of Indochina should be 
shaped to fit reality. The reality is that new governments are in firm 
control in Vietnam, Cambodia, and Laos. 

Seven years ago the Senate approved a resolution, offered by 
Senator Cranston, which stated that — 



90 



8 

When the United States recognizes a foreign government 
and exchanges representatives with it, this does not of itself 
imply that the United States approves of the form, ideology, 
or policy of that government. 

In other words, the Senate has said that diplomatic recognition is 
simply a recognition of de facto and de jure control. That should be 
the basis for U.S. policy toward the new governments of Indochina. 

Americans are a generous people, willing to bury the mistakes of 
the past and look to the future. A generation ago our Nation was locked 
in a life and death struggle with Germany and Japan. Today they are 
allied with us. National interests are not immutable. Interests, and the 
policies to further them, must reflect a changing world. We should 
look to the past for wisdom, to learn how to shape the future, not for 
the purpose of perpetuating animosity or bitterness. 

I urge the next President to make a thorough review of U.S. policy 
in Asia with a view to wiping the slate clean. It is not easy for 
bureaucracies or individuals to shake off the habits or associations of 
decades. Much of the Government foreign affairs bureacracy, from 
State Department policymakers to CIA operatives, appear to me to 
be still too closely attuned to policies of the past. 

There are deep suspicions in the region that remnants of operations 
related to the old policies continue, particularly as to CIA operations. 
It may be that intelligence gathering, for example, has not yet been 
keyed to the new situation in Indochina and to the goal of normalizing 
relations with China. In any event, I hope that the Select Committee 
on Intelligence will make a thorough review of current intelligence 
operations in Asia to insure that they are consistent in all respects with 
long-range national objectives. 

In closing, I add a short postscript to my recent report to the 
Committee on Foreign Relations concerning Japan and Korea. 

Both en route to and on return from Southeast Asia, I stopped in 
Tokyo to receive a briefing on recent developments from officers of 
the U.S. Embassy. The Lockheed scandal continues to dominate 
Japanese political affairs as the Watergate affair did here for so long. 
Prime Minister Miki's determination to bring out all the facts, regard- 
less of where the chips might fall, has created great controversy within 
his own party but has met with widespread public and news media 
approval. It is to be hoped that the matter will be handled in such a 
way that neither the confidence of the Japanese people in their govern- 
mental processes nor that nation's political stability will be damaged. 

As to the incident in Korea, the brutal killing of two American 
officers in the joint security area of the Korean demilitarized zone, and 
subsequent actions have aroused passions on both sides, underlining 
what I said in my report scarcely a month ago : "Korea is a time bomb 
which has yet to be defused." 



91 



9 

This is not the first inflammatory incident to occur in the nearly 
quarter of a century since the cease-fire agreement that ended the 
Korean war. And it will not be the last. When fighting men are placed 
in close proximity to the enemy on a daily basis incidents are bound 
to happen. It takes only a match to start a conflagration. 

The President is to be commended for having insisted that U.S. 
officials keep cool in the recent tragedy because under existing cir- 
cumstances U.S. forces will be involved inevitably in any outbreak 
of fighting in Korea. The swift dispatch to Korea of additional U.S. 
attack aircraft and a carrier task force demonstrate that under current 
contingency plans, U.S. military forces will be involved from the 
outset in any resumption of hostilities, despite the constitutional 
responsibility of Congress to declare war. 

The United States is in a vise in Korea from which it must eventually 
extricate itself by a phased withdrawal of forces while simultaneously 
seeking a permanent solution to the conflict. It is to be hoped that the 
recent incident will not delay U.S. initiatives in that direction. 



Exhibit 1 



Excerpts From Winds of Change — Evolving Relations and 
Interests in Southeast Asia — August, 1975 

i. three variations on neutralism 

President Nixon's visit to Peking in 1972 released strong winds of 
change in the international relationships of Asia. The collapse in 
South Vietnam and Cambodia intensified these currents. Visible 
changes already include the restoration of contact between the 
United States and China looking in the direction of normalcy after 
many years of acrimonious confrontation. This shift has been a key 
factor in enabling us to reduce the U.S. military presence in Asia 
from some 650,000 at the height of the Indochina war to less than 
60,000 at present. Moreover, a further reduction will take place in 
the months ahead as U.S. forces are withdrawn from Thailand. 

U.S. policy, in short, is beginning to reflect the fact that the United 
States is a Pacific nation, but not a power on the Asian mainland. 
The waters of the Pacific touch the shores of the United States on 
the West Coast, at Hawaii, Alaska, the territory of Guam and the 
U.S. trust territories. They also beat against the coastlines of seven 
nations to which we have made security commitments — Japan, 
South Korea, Taiwan, the Philippines, Thailand, Australia and New 
Zealand — as well as the shores of the Soviet Union and China. What 
takes place in this vast region is of deep concern to this nation. 
However, concern and capacity to influence are quite different. What 
we began to perceive in Korea and saw very clearly in Indochina 
is that our capacity to influence the flow of history on the Asian 
Mainland itself is quite limited on the basis of any rational input of 
manpower and resources. 

After the birth of the People's Republic of China in 1949, we es- 
tablished a policy of containment of Communist China. It was a 
policy which sought to line up nations on an either "for or against" 
basis with "neutralism" regarded as something to be spurned. A 
ring of treaties was engineered in an effort to use U.S. power and in- 
fluence to choke off what were held to be China's aggressive designs 
on its neighbors. In Southeast Asia, both Thailand and the Philippines 
linked their foreign policy directly to what became a U.S. crusade 
against communism on the Asia Mainland, Burma and Cambodia, 
each in its own way, tried to walk the tight rope of non-involvement. 
The former did so throughout the Indochina war, in part, by rejecting 
U.S. and other forms of foreign aid. Under Prince Norodom Sihanouk, 
Cambodia also held the line of non-involvement successfully for 
many years. When the Prince was overthrown by a military coup, 
however, the Khmers paid the cost in five years of bloody war. 

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12 

The overthrow of Sihanouk also added more U.S. casualties and 
billions to U.S. costs in Indochina as this nation went from non- 
involvement to the aid of the successor military regime in Phnom 
Penh. 

Throughout Southeast Asia, nations are now making major reas- 
sessments of their relationships. Nationalism and neutrality, mixed 
with a budding interest in regional cooperation, are the driving 
forces at work. Neutralism takes on different characteristics in each 
of the Southeast Asian nations. Burma is a study of traditional 
neutrality with a heavy accent on isolationism. Thailand, the only 
nation in the region to remain free of colonial rule before World War 
II, is engaged in writing another chapter in its long history of seeking 
to balance its independence amidst shifting political currents. Three 
decades after close alignment with and vestigial dependency on the 
United States, the Republic of the Philippines is moving into the more 
open waters of international relations and accelerating its efforts to 
achieve a fully independent identity. 

As new relationships evolve in Southeast Asia, new problems are 
emerging among the nations in the area and in their relations with the 
United States. Changes in an old order always carry a degree of pain- 
ful adjustment. It is to be hoped, however, that out of the old, even- 
tually will emerge a new spirit of self-reliance and regional cooperation. 
In that fashion, the independent nations of the region may be able 
to live together in a zone of peace respected by all of the great powers. 
That is the goal towards which each nation visited, in its own way 
and to some degree, all of them together, seemed to be moving. 

The Asian nations are very likely to call for adjustments of all of 
the relationships with the West which grew out of a previous state of 
dependency. We should do our best in our own interests to accom- 
modate to changes of this kind. They involve, in many cases, as in 
Indochina, the lightening of an excessive and one-sided burden which 
has been maintained for decades by the people of the United States. 
From our own point of view, it would be desirable to subject the 
Southeast Asia Collective Defense Treaty, the so-called Manila Pact, 
to critical reexamination. The treaty seems to me of little relevance 
to the security of this Nation in the contemporary situation. In fact, 
it may be more a liability than an asset to all of the signatories. 
As for our relations with Indochina, it would seem to me helpful in 
dealing with the vestigial problems of the war and in paving the way 
for a peaceful future to establish direct contact with the successor 
governments in Vietnam and Cambodia at an appropriate time. 

It would be unfortunate if out of indignation or disillusionment we 
should turn our backs on Asia. More in line with our interests would 
be to seek to understand more clearly what is transpiring on that con- 
tinent. Our young people, in particular, need as much exposure as 
possible to the changes in Asia since they will experience in the years 
ahead most of the consequences. Through diplomacy and cultural 
contacts we should be able to harmonize our reasonable national 
interests in security, trade and cultural cross fertilization with the 
emerging situation in Southeast Asia. The present transition need 
not be a source of anxiety if it is approached in that fashion. Indeed, we 
could be on the verge of a new era which could bring great benefits 
both to the Asian countries and to this Nation. 



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II. BURMA 

Neutrality and nonalignment 

Under President Ne Win, Burma has navigated a course of neutral- 
ism and nonalignment for many years. Its relations with the great 
neighboring states of China and India are correct and formal and the 
same is true for the Soviet Union and the United States. Burma has 
no intimates and seeks none. It has sought to avoid foreign entangle- 
ments. Although it was an early member of the United Nations, only 
in 1973 did the nation even join the World Bank and the Asian 
Development Bank. In the United Nations and other international 
forums, Burma has abstained on many divisive issues. For years it 
has recognized both Koreas and both Vietnams. 

Burma was an observer of what happened to the Indochinese 
nations when they were drawn into great power rivalries. Their tragic 
experience was such as to provide proof to the Burmese Government 
of the correctness of its own policy. Whatever its shortcomings, this 
policy has served to keep Burma out of the conflicts which have beset 
others in Southeast Asia. Furthermore, isolated by natural mountain 
barriers on the east, west, and north the Burmans have been able to 
preserve to a greater degree than most nations in the region, their 
traditional culture. 

Speculation in Burma is to the effect that its doors may soon open 
wider, evidencing, some say, a change in attitude towards the outside 
world. One Burmese official observed to me, however, that what has 
happened is "not that Burma has changed but that the world has 
changed. " He went on to explain that a U.S. policy of detente with 
the Soviet Union and the new U.S. relationship with China signifi- 
cantly altered the framework of Burma's neutralism and made foreign 
contacts, notably with the United States, more feasible. 

Foreign observers, when discussing Burma's economy, generally 
describe it as "stagnant" or "sick." While it is obvious to a visitor 
that there is a great deal of poverty, the usual economic yardsticks 
are not exact or even very relevant when applied to a rice-based 
agrarian society. The extremes of poor and rich, for example, are not 
seen in Burma as in many other countries. Burma's economy is not 
rocketing ahead but neither as in Indochina has the land been dev- 
astated and hundreds of thousands killed and maimed by warfare. 
Also avoided so far have been the cultural upheavals and environ- 
mental despoliation which are often associated with economic devel- 
opment via heavy influxes of outside capital and foreign aid. 

Nevertheless, there are manifestations of political dissatisfaction 
from time to time which center in Rangoon and are probably directed 
in part, at least, at the lack of economic progress and opportunity. 
Three major anti-government demonstrations by workers and students 
have occurred during the last year and a half. Colleges and universities 
have been closed from time to time and leaders of workers demonstra- 
tions have been sentenced to long prison terms. 

Although a new Burmese Constitution was adopted last year, the 
government remains based on army leadership. Sixteen of 18 cabinet 
officers are military or ex-military men. While farming is still on a 
private basis, as are many shops and stores, the government runs 
much of the rest of the economy. Staples, such as rice, oil, and cloth 



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14 

are rationed, with scanty allotments. This system, plus a shortage of 
consumer goods generally undergirds a so-called "shadow economy" 
or black market. Although stable until the last year or so, prices are 
now rising. Rice stocks available for export, the country's principal 
source of foreign exchange, are dwindling due to lack of substantial 
increases in output coupled with population growth. In the last 
thirty years, the population has almost doubled to 30 million. The 
government is considering new incentives to raise rice production and 
recently increased the price paid to the farmer by 30 percent. As yet, 
however, policies have not been devised to surmount the dilemma of a 
dwindling per capita food supply as against what is seen as a possible 
loss of security and national identity which might be occasioned by 
limiting population growth in the midst of towering neighbors. 

One way to help alleviate this dilemma, at least for the immediate 
future, would be by the discovery of petroleum in exportable quanti- 
ties. After years of rejecting private investment, last year, Burma 
leased offshore tracts to two American oil companies, Exxon and 
Cities Service, and two companies from other countries. While the 
drilling has not yet yielded results, the Burmese believe the prospects 
are good. Burma is also seeking by its own efforts to extend present 
onshore oil fields which supply 70 percent of the nation's modest 
current needs. The government has not shown any interest in foreign 
involvement in the exploration for minerals, with which according to 
technical re*ports, Burma is generously endowed. 

A part of Burma's imports are presently being financed by loans 
from the World Bank and the Asian Development Bank and by 
bilateral agreements with West Germany and Japan. Three small 
Asian Development Bank projects are now underway. While the 
U.S. has not provided new dollar assistance to Burma since 1963, a 
consortium arrangement under the World Bank and the Inter- 
national Monetary Fund which involve foreign aid contributions by 
the United States, Japan, and Western European countries is under 
consideration. 

The Burmese are in the process of repairing the severe damage 
caused by an earthquake in early July at Pagan, an area of historical 
significance and the site of numerous edifices and shrines dating from 
the 11th Century. They are hampered by lack of funds which are 
being raised through public subscription. Various nations have made 
contributions through their embassies in Rangoon for this very worth- 
while endeavor. Shortly before I arrived, U.S. Embassy officials had 
asked Washington for permission to make a small monetary contribution 
to assist in the repair of the damage at Pagan. The request was denied, 
apparently on some semantic or obscure basis and the matter was 
buffeted from pillar to post in the bureaucracy. It is amazing to find 
that in an Executive Branch which frequently finds ways unknown 
even to the Congress to rush tens of millions in aid to shore up a sink- 
ing regime as in the closing days of the Cambodian debacle, is unable 
to find a basis for a modest human gesture in the face of a natural dis- 
aster such as occurred in Burma last summer. One can only note that 
if more authority is necessary to act in a situation such as this, why 
has it not long since been requested? 

The drug trade and insurgents along the Burmese border create a 
dangerous mixture. Twenty groups, most of them based on ethnic 



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15 

divisions and some quite small and of little contemporary significance, 
are now in various degrees of insurrection or insurbordination with 
regard to the government in Rangoon. It is possible to divide the fac- 
tions into three basic groupings. The first type seeks to replace the 
existing government and is exemplified by the Burma Communist 
Party, the largest single dissident element. Typified by the Kachin 
Independence Army (KI A) , a second group seeks autonomy in ethnic 
areas. The third consists simply of out-and-out drug traffickers and 
bandits, some of whom are remnants or descendants of the forces as- 
sociated with the National Government which fled from China in 
1949 and which, for a time, were supported from Taiwan. 

Opium is a traditional crop in the hill areas of Northeast Burma. 
It is estimated that the crop may reach 440 metric tons this year even 
though the price is currently depressed because of the loss of the 
South Vietnamese market. All the insurgent groups are believed to be 
financed, at least in part, through the drug traffic. The Chinese 
(Nationalist) Irregular Force which is still organized into the 3rd and 
5th divisions is the most important group involved in the drug traffic. 
Another element is the Shan United Army, which operates in the 
Northern Shan states. 

Each organization has its own "turf" in the remote and scarcely 
accessible border areas as well as its own methods of operations. In 
simplified form, the cycle of operations, runs as follows: the trafficker 
buys the crude opium from the grower, transports it to the Thai 
border, sells it, uses the proceeds to buy arms or other goods, brings the 
arms and goods back into Burma, sells them on the black market. The 
cycle is completed when the proceeds from the black market sales are 
used to buy more opium. 

The Burmese Government is concerned with the drug traffic both 
because of the growing consumption of drugs in the country and 
because suppression of the trade is seen as an essential element in 
dealing effectively with the insurgency problem. After an initial 
reluctance, Burma has agreed to accept eighteen helicopters which 
are available under the U.S. narcotics control program. Four helicopters 
have been delivered, on a trial basis, and, if results are mutually satis- 
factory, the remainder will be turned over, in due course, to the 
Burmese government. 

In addition to this arrangement, there have been some small 
Burmese purchases of U.S. military related goods. The Burmese 
government, however, has indicated no interest in renewal of military 
aid program or in obtaining military training for its forces in the 
United States. 

A note of caution is indicated in regard to cooperation in drug 
suppression. The zeal of U.S. enforcement officials in trying to get 
at the sources of drugs is understandable and merits much applause. 
Nevertheless, there are other questions involved in Burmese-U.S. 
relations. For too long in the administration of U.S. policies, we have 
tended to assume responsibility for problems which are more properly 
those of other nations or of the international community. One form of 
involvement in the internal affairs of other nations can lead very 
rapidly to other forms, as the bitter Indochina experience should have 
taught us. 



98 



16 

In my judgment, therefore, any further U.S. assistance to foreign 
countries for their internal use in anti-drug problems, if warranted at 
all, would seem more appropriately to be funneled through interna- 
tional bodies. Whatever funds Congress thinks justified for this 
activity might well go as a contribution to the U.N.'s Narcotics 
Control program. Moreover, any activity of U.S. narcotics agents in 
Burma or any other nation in Southeast Asia, for that matter, must 
remain under the strict supervision and firm control of the U.S. 
Ambassador who is in the best position to know what practices are 
or are not possible in the light of our total relationship with the country 
concerned. 

After my visit to Burma six years ago, I wrote: "The Burmese 
government continues to go its own way as it has for many years. 
It is neither overawed by the proximity of powerful neighbors nor 
over-impressed by the virtues of rapid development through large 
infusions of foreign aid. Burma's primary concern is the retention of 
its national and cultural identity and the development of an economic 
system preponderantly by its own efforts and along its own lines." 

These are still the major preoccupations of the Ne Win govern- 
ment. The nation has succeeded in maintaining its national and 
cultural identity. Its economic situation, however, is still very tenuous. 

As for our relations with Burma, while some strengthening of 
cultural and technical exchange either on a bilateral or multilateral 
basis may be desirable and possible, my view is that we would be well- 
advised to avoid scrupulously any inclinations towards a deepening 
involvement in Burmese affairs. Such inclinations would not be 
welcomed in Burma as in its best interests. Clearly, too, they would 
not be in the best interest of this nation. 

III. THAILAND 

After four decades of military rule, Thailand is attempting anew to 
forge a democratic system. At the same time, there is underway a 
major revision in foreign relationships. Following student uprisings, in 
October 1973, the military government of Field Marshal Thanom 
Kittikachorn was ousted and Thanom and other government leaders 
fled the country. This development, coupled with the rapidly changing 
situation in Asia, initiated by President Nixon's trip to Peking, and 
culminating in the collapse in Indochina, has brought about a sweeping 
reappraisal by Thailand of its foreign policy. 

Until the fall of the Thanom government, Thailand had maintained 
a close relationship — some termed it a "client-state" relationship — 
with the United States. Now that has changed, with Thailand moving 
away from the long intimacy with the United States and, at the same 
time, seeking better relations with its neighbors in Indochina and 
Asia. How this land of 44 million people handles the turn towards 
political democracy and a new foreign policy will have far-reaching 
consequences for the over-all relationships in and around the Asian 
continent. 

Political and economic situation 

Prime Minister Khukrit Pramot, leader of the Social Action Party, 
has governed Thailand since mid-March with a coalition of eight 
parties. His own party, with only 18 seats, is a distant third in terms 



99 



17 



of party strength in the Parliament. While the Thai King, Phumiphon 
Adunyadet, serves primarily as the symbol of national unity, the 
monarchy is still a factor in state affairs, particularly, in times of crisis. 
The present Thai political system is based on a Parliament consisting 
of 269 seats in an elected Lower House and a 100-member appointed 
Upper House. Elections earlier this year attracted 42 parties and 2,191 
candidates. Predictably, the results were inconclusive. There are now 
representatives from 23 parties sitting in the Parliament which, when 
I visited it, was meeting in a joint session and engaged in spirited 
debate over an aspect of ASEAN. Despite earlier predictions of a short 
and unhappy life, the Parliamentary structure is managing to hold 
together and is serving as a vehicle for operative government. 

The Khukrit cabinet, apart from the difficulties inherent in any 
coalition and, especially in one emerging from the trauma of an abrupt 
shift from military authoritarianism, is subject to three basic pressures; 
a volatile student movement; long-standing insurgencies in the north 
the northeast and the south; and the ever present possibility of a 
military coup. 

The student movement wields influence, as is often the case in 
Asian nations, far beyond numbers. There is a working relationship 
between the students and labor on most issues and this coalition 
constitutes the most potent force in current Thai politics. It may be 
less of a factor, however, than it was two years ago at the time of the 
ousting of the dictatorship. Public reaction in Bangkok to past ex- 
cesses, it is said, has caused student leaders to be more discriminating 
in choosing issues on which to exert their pressure. 

One personal incident was instructive. When I arrived for an ap- 
pointment with the Prime Minister, hundreds of out of work Thai 
guards at U.S. military bases, who are being discharged as the bases 
are phased out, were engaged in a demonstration demanding final pay 
adjustments. The guards were not on U.S. payrolls but, rather, were 
paid indirectly on the basis of U.S. contracts with Thai military leaders 
of the previous regime, some of whom apparently have fled the country. 
Since the demonstration was taking place in front of the Prime 
Minister's offices, it was necessary to postpone the meeting lest the 
presence of a visiting American official trigger more serious difficulties. 

Ever present in the background of Thai politics is the potential for 
a military coup. While the government appears to command the 
loyalty of the armed forces, rumors of possible coups abound in 
Bangkok. Perhaps, the principal deterrent is the public revulsion with 
the rampant corruption of the previous military regime and the 
possibility that a coup at this time would again bring on a militant 
student-labor reaction. 

The role of the military has been deemphasized by the present 
government which appears to want to direct its energies towards 
social and economic needs. Heretofore much of the government's 
interest centered on Bangkok. With 4 million people, Bangkok is 
Thailand's only major city and it is scarcely representative of the 
nation. The gap between Bangkok and the rest of the country is great. 
Per capita income in the capital, for example, is $600 per year, but 
•it is only about $200 nationally, and it is, perhaps, not more than $75 



There has been little spread of commerce and industry from Bangkok 
to the countryside. The city, in some respects, is like a foreign land to 




most 




area, the northeast. 



100 



18 



most Thais. Its traffic jams, westernized practices and political maneu- 
vering are quite alien to the villagers who make up the vast majority- 



Neglect of the villages is a major factor in fueling the insurgency- 
movements. In the north the insurgents are ethnic groups often 
involved in the drug traffic. In the northeast, the problem is peasant 
discontent and Thai against Thai. In the south, it is largely Malay 
muslim or Chinese against Thais. 

Over the years, there have been any number of anti-insurgency 
campaigns launched by Bangkok, all liberally financed with U.S. 
funds and, often, abetted with advice from various U.S. agencies. 
None has Drought any appreciable results. The insurgent movements 
have continued to grow, with a total of perhaps 8,500 now under 
arms in the northeast alone. The Khukrit government seems to be 
aware that the problem cannot be solved unless there is more effective 
contact between a heretofore remote government in Bangkok and the 
people in the localities. It is trying new approaches which include a 
form of revenue sharing to channel funds to the poorest areas. Also 
recognized is the need to change the attitudes of the underpaid and 
corrupt bureaucracy in the insurgent areas. While it may be difficult 
to persuade soldiers and police who have reaped much of the financial 
benefit of past anti-insurgent campaigns to become benefactors of 
villagers, at least an effort is being made to bring about a reorienta- 
tion. The government's five year plan also emphasizes economic 
growth in the rural areas and reduction in income disparities. It 
remains to be seen whether the benefits will actually reach the people. 

The Thai economy has weathered the oil crisis, the world recession, 
and the phase-out of U.S. military involvement in Indochina. Although 
the rate of inflation was 20 percent in 1974, up from an average of 4 
percent in the years before, it has been falling and will probably be 
down to about 10 percent for 1975. Increased earnings from agricul- 
tural exports have been a prime factor in countering oil price increases. 
The impact of both the recession and the uncertainty over political 
developments in the region have been felt in the slackening of foreign 
investment. Tourism, too, is down. Nevertheless, Thailand enjoyed a 
$400 million surplus in its over-all balance of payments in 1974 in 
the face of a deficit of $657 million in trade. The difference was made 
up by foreign aid, oil concession payments, tourism and capital 
inflows. 

The United States has given Thailand large amounts of economic 
aid over the years, much of it in the last decade for the so-called 
counter-insurgency programs. Thus far, a total of $672 million in 
economic aid has been provided by the United States. For fiscal 
year 1976, $12 million has been requested. 

In an economy as formidable as Thailand's, $12 million must be 
regarded as relatively inconsequential. The government's political 
and economic policies are the critical factors in shaping the nation's 
future. There would appear, therefore, to be little relevance to either 
country in the continuance of the bilateral aid program. Indeed, the 
time seems very propitious to end this vestige of "clientism" and to 
place the relationship of the two nations on a firm plane of mutual 
respect, with accent on mutually beneficial exchange. 




101 



19 

Petroleum 

There are prospects for major offshore petroleum strikes in the 
Gulf of Siam on Thailand's east coast and in the Andaman Sea west 
of the Kra Isthmus. Twenty-five wells have been drilled by American 
companies in the Gulf of Siam. Oil has been found, but the potential 
is not yet ascertainable. There could be international difficulties in 
some areas since most Thai concessions, overlap in part, territory 
also claimed by Cambodia. Thus far, however, there has not been any 
drilling in disputed areas. Some concessions have also been issued 
for the Andaman Sea but work there is not likely to start until next 
year. Thailand has already received more than $75 million for drilling 
rights from foreign prospectors. Renewed consideration is also being 
given by the Thai government to a proposal to join with Japan in 
constructing a major pipeline stretching across the Kra Isthmus, and 
terminating in a large refinery which would refine Persian Gulf crude 
for shipment to Japan. 

Drugs 

Thailand is a major site in the international drug problem, not so 
much as a producer but as the route of transshipment of opium brought 
in from elsewhere in Southeast Asia. Estimates indicate that about 
40-45 tons of opium per year are actually produced in Thailand. This 
level is sufficient only to meet local demand. 

Although some Thai officials may still be parties to the drug trade, 
the level of involvement is reported to be much lower than in the past. 
Contrary to the situation in Burma, drugs do not seem to be a signifi- 
cant source of financial support for insurgents but, rather, a means 
for personal or syndicate enrichment. 

Thailand receives equipment from the United States under the 
narcotics control program. In fiscal year 1975, $4.8 million was pro- 
vided, with $3.7 million more programmed for FY 1976. Bangkok is 
a regional headquarters for the U.S. Drug Enforcement Agency 
(DEA) which is active throughout Southeast Asia. The agency has a 
regional budget of $500,000, but the figure does not include assistance 
to other governments which runs into the millions. There are 26 U.S. 
agents in Thailand and they are involved in operational actions as 
well as intelligence gathering. The day before my arrival, for example, 
U.S. agents and Thai police had carried out a joint raid on an opium 
refinery. 

This sort of U.S. anti-drug activities in Thailand seems to be highly 
dubious. Quite apart from the expenditure of U.S. funds, the direct 
participation by U.S. agents in police activities within Thailand 
amounts to involvement in internal Thai affairs. While it undoubtedly 
is meritorious in objective, it is a foot-in-the-door, a point of entry 
which could lead to extensions and in the end, renewed entrapment 
in the internal affairs of that nation at renewed cost to the people of 
the United States. The sorry history of military and economic aid and 
other activity in Indochina and Thailand over the past two decades 
should serve as a precaution in this respect. Police actions, including 
local drug enforcement, are functions of indigenous governments. 
" If there is a U.S. role it should be limited to the exchange of informa- 
tion and intelligence with appropriate Thai or other officials. Beyond 
that point, U.S. financial assistance for antidrug operations at what- 



102 



20 

ever level may be set by the Congress, in my judgment, is best chan- 
neled through international or regional organizations. 

Foreign policy and U.S.-Thai relations 

President Nixon's trip to Peking and the end of U.S. involvement in 
Indochina have created a new milieu for Thai foreign policy. From 
direct links and intimate cooperation with the United States in matters 
of security, Thailand has moved towards a neutral position. An effort 
is now being made by Bangkok to assure good relations with all the 
major powers. A case in point was Prime Minister Khukrit's visit to 
Peking in July which resulted in the establishment of diplomatic 
relations with China. So, too, was the official protest to the United 
States over the use of Thai bases in the Mayaguez affair. That inci- 
dent, moreover, was followed by a demand for the complete with- 
drawal of U.S. forces from Thailand. 

The outcome of the Indochina war was not only a factor in the new 
Thai approach to China, it also resulted in intensified interest in 
closer association with the Southeast Asian nations. Within five months 
after taking office, Khukrit visited not only Peking but all of the 
ASEAN countries. Thailand joined in support of the proposal to 
create in Southeast Asia a zone of "peace, freedom, and neutrality" 
which would be guaranteed by the great powers. There is no indica- 
tion thus far, however, that this grouping will include any type of 
joint security arrangement. In that sense it would not be a substitute 
for the SEATO Organization which Prime Minister Khukrit and 
President Ferdinand Marcos of the Philippines have urged should be 
"phased out to make it accord with new realities in the region.' ' This 
proposal, it should be noted, relates only to the organized activities 
under the Southeast Asian Treaty and the large headquarters staff 
in Bangkok. It does not involve a renunciation of the actual treaty, 
the so-called Manila Pact. Thailand is the only signatory in the area, 
however, to which the Pact now has practical application insofar as 
a U.S. security commitment is concerned. Pakistan renounced the 
treaty several years ago and the Philippines, Australia, and New 
Zealand, are tied to the United States by other defense arrangements. 

The security relationship between the United States and Thailand 
is complicated by the existence of the 1962 Rusk-Thanat communique 
in which the obligations of the Manila Pact were held to be both 
joint and several. Under that interpretation, it would seem the multi- 
lateral SEATO treaty would also amount to a bilateral U.S.-Thai 
treaty. Thus, the treaty, potentially, has far more significance than the 
"scrap of paper," as it is often called today. An attack for example, 
by an enemy in Southeast Asia could conceivably lead on a Thai 
call on the United States to come to its aid notwithstanding the dis- 
inclination of any other of the signatories to do so. 

The fact is that the Manila Pact was born of an old and now altered 
view of China. It is of no current relevance to U.S. interests in Asia. 
Left in abeyance it is, perhaps, a source of potential mischief or em- 
barrassment. We would be well-advised, therefore, to reexamine this 
agreement forthwith, with a view to its termination. 

It should be noted in t^iis connection that Prime Minister Khukrit 
has called for the complete withdrawal of the 19,000 U.S. military 
forces in Thailand by the end of March 1976. Some references, how- 
ever, have been made to the possible retention of a standby capacity 
at the U Taphao Base, manned by a small caretaker force. 



103 



21 

For more than a decade, my view has been that the United States in 
its own interests should withdraw militarily from the Southeast Asian 
mainland, "lock, stock and barrel." It remains my judgment that it is 
not in the interest of this nation, nor probably, in the interest of 
Thailand to have a U.S. capacity retained at any of the installations 
in Thailand. There should be no toe-hold which would serve as a 
potential source of reinvolvement of U.S. military forces on the 
Southeast Asian Mainland. 

LAOS THE SANDS RUN OUT 

It has been said that in Laos the French laid foundations of sand 
and that we tried to build on them. As seen from Thailand, the sands 
have run out. Since the fall of Cambodia and South Vietnam, the 
Pathet Lao have rapidly expanded their control of Laos. The advance 
occurred without much resistance or bloodshed, with the opposition 
tending to evaporate or flee the country. Three of the five government 
military commanders had left the country by early August and another 
left shortly afterwards. 

In the capital of Vientiane, the Pathet Lao have also extended their 
control of the coalition central government. Prime Minister Souvanna 
Phouma is still in nominal command but he is reported to be virtually 
powerless. The King remains on the throne but is said not to play a 
political role. Laos is now described as a "Democratic People's 
Kingdom." 

U.S. relations with Laos are strained and minimal following the 
forced closing of U.S. aid operations last June. The size of the U.S. 
mission dropped from 800 (including dependents) in April 1975 to 32 
by mid-August. It is estimated that there are also some 50 other 
Americans without official status remaining in Laos. U.S. assistance is 
not being provided to Laos as a result of a prohibition contained in 
the continuing appropriations resolution for FY 1976. The new U.S. 
Ambassador to Laos has been confirmed by the Senate, but as of late- 
summer had not yet been ordered to his post. In this fashion, a U.S. 
involvement of 22 years which cost billions of dollars and many lives, is 
drawing to a close. 

Exactly 20 years ago, in 1955, on the occasion of a third visit to Laos, 
I reported to the Committee as follows : 

"* * * military aid policies which seek to do more than bulwark the 
security forces to the point where they can cope with armed minorities 
and stop occasional border sallies seem to me to be highly unrealistic. 
By the same token economic aid programs which attempt to move an 
ancient pastoral country overnight from the age of the oxcart to that 
of the airplane are equally unsound to say the least. Both, in attempt- 
ing to do too much, in my opinion, can do incalculable harm. 

"In Laos as in Cambodia, there has been an enormous increase in 
United States activity and in the size of the (U.S. official) mission 
during the past year. At the time of my first visit to Vientiane in 1953, 
there were two Americans in the entire country. Now (1955) there are 
some 45. Accordingly, I recommend that the Executive Branch, as 
in the case of Cambodia, review the extent of our activity in Laos and 
, the size of the mission with a view to keeping both within the realm of 
the reasonable." 



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